Diversifying Ltd. to Non-IT as well as IT

[xux42]

My Ltd was set up for IT Services and this remains it principal activity.
Just recently I have started to do a little photographic work, 1 wedding (as assistant), some private discos and a small rock/pop gig.
I have quality gear and have captured a few nice shots, but the exposure/focus success rate pitiful. Its clear that even from this small number of events that low light is difficult and also demands faster glass, better high ISO performance and better low light AF accuracy.
Is it OK for my Ltd. to buy non-IT equipment such as cameras and lenses and subsequently invoice for the images?
I will check with my accountant later, but I don't have her contact details with me onsite.
Aside from the tax and legal question, it does feel like a good idea to hone a commercial non-IT skill that I could perhaps ramp up when IT work is scarce.

[Sockpuppet]

Did you get paid for the assistant work?
Do you have a website advertising your services?
Do you expect to get future income from the work or will it suddenly dry up and leave you with some nice equipment for your hobby?

If you're planning on making this a serious money making venture (i.e. earn back more than the cost of the equipment) I would buy it personally as you'll have to charge VAT (assuming you're registered) on the photos if done through company. So as the price is fixed you'll end up paying more tax than you're trying to save.

If you're not planning on making back more than the cost of the equipment then you really shouldn't be claiming it through the company in the first place.

So in short, can you claim for a camera to take some holiday snaps of yourself.......what do you think?

[BlasterBates]

Yes you need to be careful, that HMRC don't see it as a hobby. If you were going to do this you should set up a separate co. Then it's clear, there would be no problem doing that because then you'd only be offsetting expenses against income for which they have occured. You can't just buy a guitar or a sound equipment and offset against income from IT services, your accountant won't allow it.

[xux42]

Did you get paid for the assistant work?
Do you have a website advertising your services?
Do you expect to get future income from the work or will it suddenly dry up and leave you with some nice equipment for your hobby?

If you're planning on making this a serious money making venture (i.e. earn back more than the cost of the equipment) I would buy it personally as you'll have to charge VAT (assuming you're registered) on the photos if done through company. So as the price is fixed you'll end up paying more tax than you're trying to save.

If you're not planning on making back more than the cost of the equipment then you really shouldn't be claiming it through the company in the first place.

So in short, can you claim for a camera to take some holiday snaps of yourself.......what do you think?

Er well - I'm booked as assitant photographer for 2 weddings next year so far. Assistant means taking the supplementary shots (the principal photograper can't be everywhere at once) and helping get shots that need 2 pairs of hands - it is not something like a golf caddy!
I will be taking fees iro £200 a pop but clearly I need more bookings to cover the cost of the gear.
I already have a prosumer Pentax DSLR, sharp glass, wireless pro flashgun etc. and can get great results in daylight and studio lighting.
I need new equipment specifically for the peculiar demands of low light.
I am not VAT registered but will have to be for 12/13 due to mid year rate hike.
I think you are saying the diversification is fine as long as its a legitimate business expense.
How about if the new gear is never used for personal photograpy? I have Olympus Pen micro 4/3 gear for that.

[malvolio]

Er well - I'm booked as assitant photographer for 2 weddings next year so far. Assistant means taking the supplementary shots (the principal photograper can't be everywhere at once) and helping get shots that need 2 pairs of hands - it is not something like a golf caddy!
I will be taking fees iro £200 a pop but clearly I need more bookings to cover the cost of the gear.
I already have a prosumer Pentax DSLR, sharp glass, wireless pro flashgun etc. and can get great results in daylight and studio lighting.
I need new equipment specifically for the peculiar demands of low light.
I am not VAT registered but will have to be for 12/13 due to mid year rate hike.
I think you are saying the diversification is fine as long as its a legitimate business expense.
How about if the new gear is never used for personal photograpy? I have Olympus Pen micro 4/3 gear for that.

It fails the duality of purpose rules. "Wholly and exclusively" canot be guarantted, sicne you can easily take it on holiday with you.

Set up a separate company. Costs peanuts, avoids the VAT complications, keeps your expenses/income/expenditure aligned and you can pay any profits out as dividends. Anything else is adding unnecessary risk.

[xux42]

Yes you need to be careful, that HMRC don't see it as a hobby. If you were going to do this you should set up a separate co. Then it's clear, there would be no problem doing that because then you'd only be offsetting expenses against income for which they have occured. You can't just buy a guitar or a sound equipment and offset against income from IT services, your accountant won't allow it.

See separate reply, plus - its amusing that the immediate assumption is that I am trying to pass off personal gadget consumption as a business expense - there are obviously some right chancers in IT freelancing!
On a more serious note - surely having to set up a separate company is discrimination against the small guys - for instance, I suspect BP would laugh at HMRC if they tried to tell them to set up a separate co. because a new venture was not energy related.

[xux42]

It fails the duality of purpose rules. "Wholly and exclusively" canot be guarantted, sicne you can easily take it on holiday with you.

Set up a separate company. Costs peanuts, avoids the VAT complications, keeps your expenses/income/expenditure aligned and you can pay any profits out as dividends. Anything else is adding unnecessary risk.

You're probably right but I does feel a bit like HMRC don't trust IT Freelancers - sort of guilty until proved innocent attitude.

[tractor]

..

See separate reply, plus - its amusing that the immediate assumption is that I am trying to pass off personal gadget consumption as a business expense - there are obviously some right chancers in IT freelancing!
On a more serious note - surely having to set up a separate company is discrimination against the small guys - for instance, I suspect BP would laugh at HMRC if they tried to tell them to set up a separate co. because a new venture was not energy related.

No, they wouldn't. In fact they will often set up a company especially for a specific project, then once the project is over, mothball the co until the next venture. Many construction companies do this also.

Getting back on topic, the equipment you are talking about is arguably not office equipment and would likely need to be treated as assets to be written down - do you really want to be paying tax on the residual value for several years?

I can understand you needing additional equipment for low light work, but for a wedding? Have you been invited to the honeymoon as well or is this for speculative work?

[Jeebo72]

My Ltd was set up for IT Services and this remains it principal activity.
Just recently I have started to do a little photographic work, 1 wedding (as assistant), some private discos and a small rock/pop gig.
I have quality gear and have captured a few nice shots, but the exposure/focus success rate pitiful. Its clear that even from this small number of events that low light is difficult and also demands faster glass, better high ISO performance and better low light AF accuracy.
Is it OK for my Ltd. to buy non-IT equipment such as cameras and lenses and subsequently invoice for the images?
I will check with my accountant later, but I don't have her contact details with me onsite.
Aside from the tax and legal question, it does feel like a good idea to hone a commercial non-IT skill that I could perhaps ramp up when IT work is scarce.

People do talk a lot a cr*p on here. If it is legitimate business expense and used only for business you can do what you like. Just because something can be used personally doen't mean it is. Also, business things can get lost / broken and so written off. Enjoy your new camera.

[SueEllen]

People do talk a lot a cr*p on here. If it is legitimate business expense and used only for business you can do what you like. Just because something can be used personally doen't mean it is. Also, business things can get lost / broken and so written off. Enjoy your new camera.

The reason people are being cautious - or what you call crap - is because HMRC inspectors aren't nice and friendly when they start digging into your affairs.

Also another thing xux42 needs to think of is insurance. I'm sure Public Liability Insurance and the car insurance add-on for a photographer is more than for most people in IT.