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Malcolm Buggeridge
19th March 2013, 08:01
I am (ostensibly, at least) a web developer / designer and I have an income stream in mind (website related) that requires photographic skills. I have the camera but not the skills so I'm looking at doing an online photography course. Yes, I know it's not going to happen overnight but I want to add another string to my bow and I need to start somewhere.

The drivers behind this are business related and, as my Ltd is a web solutions provider, photography can be argued to be relevant to its primary area of business.

Am I on shaky ground here or do you see no problem with expensing this?

LisaContractorUmbrella
19th March 2013, 08:16
IMHO you are on shaky ground as you don't have an existing photography business so you can't really use the wholly and exclusively argument, only in potentia and I am not sure HMR&C would wear it

northernladuk
19th March 2013, 10:47
Would I be right in guessing you already have a camera because you use it for personal stuff? Which kinda answers your question I think.

eek
19th March 2013, 10:51
What photography course is going to cost enough to warranty trying to put it through the company.

The tax savings are minimal so pay for it yourself.

Wanderer
19th March 2013, 11:23
photography can be argued to be relevant to its primary area of business.

Am I on shaky ground here or do you see no problem with expensing this?

Why not go and do the course, get a receipt/invoice for it and file them away. At the end of your company year, review your expenses and decide if the photography part of the business has taken off or if it turned out to be more of a hobby. If it takes off then claim it, if not then don't but don't let the tax treatment stop you doing something you want to do.

Simples.

TheFaQQer
19th March 2013, 11:46
It's adding skills with no business benefit, so no.

formant
19th March 2013, 11:46
I've done a fair bit of paid photography work over the past 5 or 6 years to supplement my permie income, only closed down that income stream when I started contracting last year (just no more need for the extra cash, and wanted to have more time off).

Paid online training courses are a huge waste of time and money. If you really want to learn, try and find a hands-on, in-person course. Or even better, approach a local professional (someone who's both good at what they do and not new to training) and pay them for one-on-one tutoring.

Otherwise, there are so many useful, free, tutorials on YouTube, you're not going to get anything better out of a paid online-course.

I think you may have issues expensing it unless it's say packshots/product photography and you're developing online retail websites or something. You'd need a pretty direct link anyway, nothing ambiguous.

BolshieBastard
19th March 2013, 11:51
Bung it through. All you have to do is weigh up the odds of being investigated against not then make your decision based on that.

Malcolm Buggeridge
19th March 2013, 12:50
Would I be right in guessing you already have a camera because you use it for personal stuff? Which kinda answers your question I think.

No, I got one and expensed it...


What photography course is going to cost enough to warranty trying to put it through the company.

The tax savings are minimal so pay for it yourself.

Its not so much the savings. I will expense everything I can to help keep me below the higher rate threshold



Paid online training courses are a huge waste of time and money. If you really want to learn, try and find a hands-on, in-person course. Or even better, approach a local professional (someone who's both good at what they do and not new to training) and pay them for one-on-one tutoring.


I think I'd benefit from the structure of a course. They also have tutors to give feedback on progress. If they do as they claim, the ones I've looked at shouldn't be a waste of money.

LisaContractorUmbrella
19th March 2013, 12:53
[QUOTE=Malcolm Buggeridge;1716250]No, I got one and expensed it...

If you were happy to expense the camera (even though it could not be realistically considered a business expense) why are you worrying about expensing the course?

Malcolm Buggeridge
19th March 2013, 12:57
[QUOTE=Malcolm Buggeridge;1716250]No, I got one and expensed it...

If you were happy to expense the camera (even though it could not be realistically considered a business expense) why are you worrying about expensing the course?

I haven't put this years accounts through yet Lisa so I may backtrack on that one!

Ignis Fatuus
19th March 2013, 13:01
IANAA but surely a business can expense something intended to bring in future profit? (by contrast with an employee, who may not expense something intended to get a different job).

Epiphone
19th March 2013, 13:32
Your company can pay for whatever it or its Directors wants it to pay for. Claiming that to reduce your Corp Tax is a different matter altogether. If you don't want to pay for it out of your personal pocket then yeah, make YourCo pay for it. Just don't claim it on the Corp Tax. How YourCo spends its money isn't a concern of HMRC - they only care what tax you're claiming and paying.

Malcolm Buggeridge
19th March 2013, 14:03
Your company can pay for whatever it or its Directors wants it to pay for. Claiming that to reduce your Corp Tax is a different matter altogether. If you don't want to pay for it out of your personal pocket then yeah, make YourCo pay for it. Just don't claim it on the Corp Tax. How YourCo spends its money isn't a concern of HMRC - they only care what tax you're claiming and paying.

In that case why not get my Ltd to pay for a whole raft of things that would reduce my personal tax liability?

Mister Clark
19th March 2013, 14:16
In that case why not get my Ltd to pay for a whole raft of things that would reduce my personal tax liability?

BIK

Malcolm Buggeridge
19th March 2013, 14:41
BIK

So, could they class my camera and course as BIK?

northernladuk
19th March 2013, 15:10
So, could they class my camera and course as BIK?

Most would argue that is all you can do with it but it is up to you. If you really believe if is wholly and exclusively for your business then just go ahead and do it. If your accountant agrees then jolly good.

It's your business, you make the decisions as it is your risk at the end of the day. The only thing I would say is look at the actual costs and remember you are only saving yourself 20% for this risk (plus being able to divi a little more) and then ask yourself if it is really worth it.. for a mega bucks contractor? I doubt it but it's your business.

Mister Clark
19th March 2013, 15:17
Most would argue that is all you can do with it but it is up to you. If you really believe if is wholly and exclusively for your business then just go ahead and do it. If your accountant agrees then jolly good.

It's your business, you make the decisions as it is your risk at the end of the day. The only thing I would say is look at the actual costs and remember you are only saving yourself 20% for this risk (plus being able to divi a little more) and then ask yourself if it is really worth it.. for a mega bucks contractor? I doubt it but it's your business.


WHS.

To answer your question, if its wholly and exclusively for business use then put it through the books and it won't be subject to any BIK so long as the tax man agrees with your reasoning should you be asked the question.

If it aint your gonna pay BIK on it. That's why you don't use your company to pay for a load of stuff - the tax man want's his pound of flesh and he is gonna get it one way or another.

The general themes of your posts seem to be ways you could reduce your personal tax burden (nothing wrong with that); if you look a bit more long term you can easily retain 85% of what you bill.

Malcolm Buggeridge
19th March 2013, 15:56
Most would argue that is all you can do with it but it is up to you. If you really believe if is wholly and exclusively for your business then just go ahead and do it. If your accountant agrees then jolly good.

It's your business, you make the decisions as it is your risk at the end of the day. The only thing I would say is look at the actual costs and remember you are only saving yourself 20% for this risk (plus being able to divi a little more) and then ask yourself if it is really worth it.. for a mega bucks contractor? I doubt it but it's your business.

Well, all I can say is that there is a genuine business motivation behind this.


if you look a bit more long term you can easily retain 85% of what you bill.

Long term? Please enlighten me Mr Clark...

Alan @ BroomeAffinity
19th March 2013, 16:06
[QUOTE=Malcolm Buggeridge;1716433Long term? Please enlighten me Mr Clark...[/QUOTE]

If I may: Salary circa £7,000; VAT Flat rate profit; spousal shareholding; withdraw up to max per annum before hitting 40%; pension contribution; tax efficient company closure. Some or all of these.

northernladuk
19th March 2013, 16:17
Well, all I can say is that there is a genuine business motivation behind this.


There is your answer then. And if this is the case don't forget to put in for larger microsims if needed, photoshop and any other connected costs. If you are gonna do it then do it properly.

stek
19th March 2013, 16:20
Aren't all plans B's caught by this then unless they earn from day one?

Mister Clark
19th March 2013, 16:21
If I may: Salary circa £7,000; VAT Flat rate profit; spousal shareholding; withdraw up to max per annum before hitting 40%; pension contribution; tax efficient company closure. Some or all of these.

WHS - but you have to take a longer term view of things or be married to get that sort of retention.

Personally I am not married so pay salary circa 7,500, dividends up to the 40% threshold and pension. I tend to take 6 months of in every 3 years and drawn down on the retained profits.

I have a large cash surplus at the moment and will be closing my company down and applying for entrepreneurs relief. If that does not get challenged by HMRC when I file my personal tax return for the year I should have ended up, at a guess, 82/83% retention over 6 years even when CG is applied and the fees for the administrators are accounted for.

formant
19th March 2013, 19:09
I think I'd benefit from the structure of a course. They also have tutors to give feedback on progress. If they do as they claim, the ones I've looked at shouldn't be a waste of money.

Even with a course, I'd still try to find a hands-on/in-person one. Problem with photographers is that a lot of them only go into training because they don't make enough from photography alone (often related to just not being that great). So do choose wisely, whichever option you go for.

If you're not on talkphotography.co.uk yet, you probably should be. Many people there would be happy to advise on which courses to try and which ones to give a miss!

SueEllen
19th March 2013, 21:15
Aren't all plans B's caught by this then unless they earn from day one?

Depends what the plan B is and how it links in with your current skills.

Jessica@WhiteFieldTax
19th March 2013, 22:37
If you are doing web work already then to me a photography course isn't out of the question; I see a lot more tenuous deductions!

Jessica@WhiteFieldTax
19th March 2013, 22:42
IANAA but surely a business can expense something intended to bring in future profit? (by contrast with an employee, who may not expense something intended to get a different job).

No; a lot of items can't be expensed even if they are to generate funds, eg capital costs of a franchise, new skills type training for controlling directors/shareholders - anomaly, in so far as similar training for a unconnected member of staff would go through (not unconnected: your kids uni fees don't fit in here!)

eek
19th March 2013, 22:55
No; a lot of items can't be expensed even if they are to generate funds, eg capital costs of a franchise, new skills type training for controlling directors/shareholders - anomaly, in so far as similar training for a unconnected member of staff would go through (not unconnected: your kids uni fees don't fit in here!)

I wasn't planning to pay their uni fees through the company. Instead I was going to pay them a lot for doing very little over the summer hols ala a few MPs five years back. :tongue

Jessica@WhiteFieldTax
19th March 2013, 23:04
I wasn't planning to pay their uni fees through the company. Instead I was going to pay them a lot for doing very little over the summer hols ala a few MPs five years back. :tongue


Only works if you are a MP; for mere mortals 25.8% NI plus the kids own tax eliminates the savings - unless you you just make them a temporary shareholder for the summer, give them shares in June, gift them back in September - that's a goer!

eek
19th March 2013, 23:11
Only works if you are a MP; for mere mortals 25.8% NI plus the kids own tax eliminates the savings - unless you you just make them a temporary shareholder for the summer, give them shares in June, gift them back in September - that's a goer!

Could I pay them via an employees beneficial trust running in the isle of man using fake loans in strange currencies? or do you think HMRC may see through it?

Jessica@WhiteFieldTax
19th March 2013, 23:18
Isle of Man is old hat. There are some interesting planning opportunities with Isle of Wight companies though; at least interesting for me.

Malcolm Buggeridge
20th March 2013, 07:31
.

If you're not on talkphotography.co.uk yet, you probably should be. Many people there would be happy to advise on which courses to try and which ones to give a miss!

Thanks - I will definitely look into that.