shadowuk
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April 2013
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Tax & buying art, by shadowuk on Dec 3, 2016 0:46:52 GMT 1, Not so cluded up at all on doing your own tax returns etc so asking this and it may appear a dumb question and if it is I apologise.
If you earn over £43k you have to pay 40% tax, so if I'm earning £80k for example, rather than paying the 40% 'super tax' of £14800 as well as the £8600 20% tax for the first £43k, could I buy £15k of art and claim it back as 'office equipment/decoration' every year? therefore only paying £8600 a year of taxes every year & having a great art collection?
Not so cluded up at all on doing your own tax returns etc so asking this and it may appear a dumb question and if it is I apologise.
If you earn over £43k you have to pay 40% tax, so if I'm earning £80k for example, rather than paying the 40% 'super tax' of £14800 as well as the £8600 20% tax for the first £43k, could I buy £15k of art and claim it back as 'office equipment/decoration' every year? therefore only paying £8600 a year of taxes every year & having a great art collection?
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chads007
Junior Member
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December 2012
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Tax & buying art, by chads007 on Dec 3, 2016 0:56:04 GMT 1, Not so cluded up at all on doing your own tax returns etc so asking this and it may appear a dumb question and if it is I apologise. If you earn over £43k you have to pay 40% tax, so if I'm earning £80k for example, rather than paying the 40% 'super tax' of £14800 as well as the £8600 20% tax for the first £43k, could I buy £15k of art and claim it back as 'office equipment/decoration' every year? therefore only paying £8600 a year of taxes every year & having a great art collection?
No.
Is the 15k artwork an intrinsic part or necessity to your business or its running?
Not so cluded up at all on doing your own tax returns etc so asking this and it may appear a dumb question and if it is I apologise. If you earn over £43k you have to pay 40% tax, so if I'm earning £80k for example, rather than paying the 40% 'super tax' of £14800 as well as the £8600 20% tax for the first £43k, could I buy £15k of art and claim it back as 'office equipment/decoration' every year? therefore only paying £8600 a year of taxes every year & having a great art collection? No. Is the 15k artwork an intrinsic part or necessity to your business or its running?
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chads007
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December 2012
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Tax & buying art, by chads007 on Dec 3, 2016 0:57:30 GMT 1, Charity auctions on the other hand, can maybe be used to reduce your liability, but not sure if charitable 'donation' = charity auction
Charity auctions on the other hand, can maybe be used to reduce your liability, but not sure if charitable 'donation' = charity auction
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shadowuk
New Member
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April 2013
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Tax & buying art, by shadowuk on Dec 3, 2016 1:03:26 GMT 1, I thought not but Ive read on tax websites you can buy things that make a room/office look nice such as art/mirrors/fish tanks etc to make it an attractive environment for customers.
I thought not but Ive read on tax websites you can buy things that make a room/office look nice such as art/mirrors/fish tanks etc to make it an attractive environment for customers.
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chads007
Junior Member
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December 2012
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Tax & buying art, by chads007 on Dec 3, 2016 1:10:45 GMT 1, I thought not but Ive read on tax websites you can buy things that make a room/office look nice such as art/mirrors/fish tanks etc to make it an attractive environment for customers.
If you can justify it when the tax man calls...as office furniture
But we're talking cheap, not thousands (or hundreds) of pounds of art ;-p
I thought not but Ive read on tax websites you can buy things that make a room/office look nice such as art/mirrors/fish tanks etc to make it an attractive environment for customers. If you can justify it when the tax man calls...as office furniture But we're talking cheap, not thousands (or hundreds) of pounds of art ;-p
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andyroo0312
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July 2011
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Tax & buying art, by andyroo0312 on Dec 3, 2016 1:44:12 GMT 1, Damn wouldn't it be great if you could. I could imagine Steve the tyre fitter with 5 Banksys in the office just to give it that extra ambiance which is so important when shopping for tyres these days.
Damn wouldn't it be great if you could. I could imagine Steve the tyre fitter with 5 Banksys in the office just to give it that extra ambiance which is so important when shopping for tyres these days.
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k2
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November 2016
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Tax & buying art, by k2 on Dec 3, 2016 2:36:37 GMT 1, Not so cluded up at all on doing your own tax returns etc so asking this and it may appear a dumb question and if it is I apologise. If you earn over £43k you have to pay 40% tax, so if I'm earning £80k for example, rather than paying the 40% 'super tax' of £14800 as well as the £8600 20% tax for the first £43k, could I buy £15k of art and claim it back as 'office equipment/decoration' every year? therefore only paying £8600 a year of taxes every year & having a great art collection?
Whether or not you can justify it as a business expense is one thing. But even if you could, I don't think it would work like that. Spending 15k on an 'expense' wouldn't wipe out your additional tax liability, it would reduce your profit from 80k to 65k. So you'd be paying 40% on 22k rather than 37k.
(I am very much not an accountant, so treat this reply with caution!)
Not so cluded up at all on doing your own tax returns etc so asking this and it may appear a dumb question and if it is I apologise. If you earn over £43k you have to pay 40% tax, so if I'm earning £80k for example, rather than paying the 40% 'super tax' of £14800 as well as the £8600 20% tax for the first £43k, could I buy £15k of art and claim it back as 'office equipment/decoration' every year? therefore only paying £8600 a year of taxes every year & having a great art collection? Whether or not you can justify it as a business expense is one thing. But even if you could, I don't think it would work like that. Spending 15k on an 'expense' wouldn't wipe out your additional tax liability, it would reduce your profit from 80k to 65k. So you'd be paying 40% on 22k rather than 37k. (I am very much not an accountant, so treat this reply with caution!)
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londonfx
Junior Member
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December 2013
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Tax & buying art, by londonfx on Dec 3, 2016 9:14:31 GMT 1, I seriously doubt you can claim £15k back on your tax.
I'm a limited company and have had this discussion with several accountants. And I've struggled to claim £100 for a film poster. Even tho it was direct advertising for my company!!
It's too much of a stretch to claim that amount. The account is well within their rights to question it.
They can say if you're buying for asthetic reasons. Then you can buy a reproduction version and not an original piece
I seriously doubt you can claim £15k back on your tax.
I'm a limited company and have had this discussion with several accountants. And I've struggled to claim £100 for a film poster. Even tho it was direct advertising for my company!!
It's too much of a stretch to claim that amount. The account is well within their rights to question it.
They can say if you're buying for asthetic reasons. Then you can buy a reproduction version and not an original piece
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Winks
Junior Member
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April 2016
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Tax & buying art, by Winks on Dec 3, 2016 9:24:42 GMT 1, Expenses claimed as a business expense have to be wholly, necessarily and exclusively for the purpose of a trade. Unfortunately making an office look nice doesn't fit that criteria. When deciding when an item is allowable a good test is to consider whether another trader in your profession would need and use the item in their trade.
Art can be purchased by companies for investment but no allowance is given against tax unless it is sold at a loss. If the art is used privately HMRC would expect a P11d benefit of 20% of the cost. This would result in a 20/40% personal tax bill on this amount plus a 13.8% class 1a company liability.
Expenses claimed as a business expense have to be wholly, necessarily and exclusively for the purpose of a trade. Unfortunately making an office look nice doesn't fit that criteria. When deciding when an item is allowable a good test is to consider whether another trader in your profession would need and use the item in their trade.
Art can be purchased by companies for investment but no allowance is given against tax unless it is sold at a loss. If the art is used privately HMRC would expect a P11d benefit of 20% of the cost. This would result in a 20/40% personal tax bill on this amount plus a 13.8% class 1a company liability.
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Winks
Junior Member
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April 2016
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Tax & buying art, by Winks on Dec 3, 2016 9:26:50 GMT 1, I seriously doubt you can claim £15k back on your tax. I'm a limited company and have had this discussion with several accountants. And I've struggled to claim £100 for a film poster. Even tho it was direct advertising for my company!! It's too much of a stretch to claim that amount. The account is well within their rights to question it. They can say if you're buying for asthetic reasons. Then you can buy a reproduction version and not an original piece
How do you feel about Making Tax Digital LFX?
I seriously doubt you can claim £15k back on your tax. I'm a limited company and have had this discussion with several accountants. And I've struggled to claim £100 for a film poster. Even tho it was direct advertising for my company!! It's too much of a stretch to claim that amount. The account is well within their rights to question it. They can say if you're buying for asthetic reasons. Then you can buy a reproduction version and not an original piece How do you feel about Making Tax Digital LFX?
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londonfx
Junior Member
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December 2013
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Tax & buying art, by londonfx on Dec 3, 2016 9:55:52 GMT 1, The thing is if the piece of art is purchased through the company. It then belongs to the company.
Meaning that if you sold it. The profit/loss would reflect on the company. And capital gains tax would need to be paid.
The thing is if the piece of art is purchased through the company. It then belongs to the company.
Meaning that if you sold it. The profit/loss would reflect on the company. And capital gains tax would need to be paid.
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londonfx
Junior Member
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December 2013
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Tax & buying art, by londonfx on Dec 3, 2016 9:59:25 GMT 1, expense have to be wholly, necessarily and exclusively for the purpose of a trade.
This is the important phrase.
There is an allowance for decoration. But I'm not sure how much that is. It's more descresionary than anything.
The worry is that if the tax man smells a rat. Then you open yourself up for a full investigation for the past 7 years
expense have to be wholly, necessarily and exclusively for the purpose of a trade. This is the important phrase. There is an allowance for decoration. But I'm not sure how much that is. It's more descresionary than anything. The worry is that if the tax man smells a rat. Then you open yourself up for a full investigation for the past 7 years
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Winks
Junior Member
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April 2016
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Tax & buying art, by Winks on Dec 3, 2016 9:59:32 GMT 1, The thing is if the piece of art is purchased through the company. It then belongs to the company. Meaning that if you sold it. The profit/loss would reflect on the company. And capital gains tax would need to be paid.
No CGT on a company. Straight Corporation Tax.
The thing is if the piece of art is purchased through the company. It then belongs to the company. Meaning that if you sold it. The profit/loss would reflect on the company. And capital gains tax would need to be paid. No CGT on a company. Straight Corporation Tax.
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Deleted
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January 1970
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Tax & buying art, by Deleted on Dec 3, 2016 10:11:10 GMT 1, I was buying art at around £15k a few years ago and asked accountant if coukd buy via Ltd Company but he sent me big emsil along the lines of what Winks and Londonfx said and it was pretty much a non starter. I bought it with personal cash.
I was buying art at around £15k a few years ago and asked accountant if coukd buy via Ltd Company but he sent me big emsil along the lines of what Winks and Londonfx said and it was pretty much a non starter. I bought it with personal cash.
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londonfx
Junior Member
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December 2013
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Tax & buying art, by londonfx on Dec 3, 2016 11:22:23 GMT 1, The thing is if the piece of art is purchased through the company. It then belongs to the company. Meaning that if you sold it. The profit/loss would reflect on the company. And capital gains tax would need to be paid. No CGT on a company. Straight Corporation Tax.
Yeah sorry that's what I meant
The thing is if the piece of art is purchased through the company. It then belongs to the company. Meaning that if you sold it. The profit/loss would reflect on the company. And capital gains tax would need to be paid. No CGT on a company. Straight Corporation Tax. Yeah sorry that's what I meant
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shadowuk
New Member
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April 2013
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Tax & buying art, by shadowuk on May 27, 2017 13:10:52 GMT 1, I was buying art at around £15k a few years ago and asked accountant if coukd buy via Ltd Company but he sent me big emsil along the lines of what Winks and Londonfx said and it was pretty much a non starter. I bought it with personal cash. what about if you bought say a banksy with your personal cash for £5k a few years back and sold it in todays environment for £30k. you would still need to pay capital gains on the £25k profit would you not?
I was buying art at around £15k a few years ago and asked accountant if coukd buy via Ltd Company but he sent me big emsil along the lines of what Winks and Londonfx said and it was pretty much a non starter. I bought it with personal cash. what about if you bought say a banksy with your personal cash for £5k a few years back and sold it in todays environment for £30k. you would still need to pay capital gains on the £25k profit would you not?
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Deleted
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January 1970
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Tax & buying art, by Deleted on May 27, 2017 13:21:56 GMT 1, I was buying art at around £15k a few years ago and asked accountant if coukd buy via Ltd Company but he sent me big emsil along the lines of what Winks and Londonfx said and it was pretty much a non starter. I bought it with personal cash. what about if you bought say a banksy with your personal cash for £5k a few years back and sold it in todays environment for £30k. you would still need to pay capital gains on the £25k profit would you not?
As far as i know u would indeed kop for CGT on the gain. But if you own it with partner then u can both use ur annual allowance, think its £11k and ud only be paying tax on £3k gain so not so bad.
Always assuming u declare it !
I was buying art at around £15k a few years ago and asked accountant if coukd buy via Ltd Company but he sent me big emsil along the lines of what Winks and Londonfx said and it was pretty much a non starter. I bought it with personal cash. what about if you bought say a banksy with your personal cash for £5k a few years back and sold it in todays environment for £30k. you would still need to pay capital gains on the £25k profit would you not? As far as i know u would indeed kop for CGT on the gain. But if you own it with partner then u can both use ur annual allowance, think its £11k and ud only be paying tax on £3k gain so not so bad. Always assuming u declare it !
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Deleted
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January 1970
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Tax & buying art, by Deleted on May 27, 2017 14:34:49 GMT 1, You could set up a ltd company as an online gallery or art dealer and buy art as stock to re sell. If you do not manage to sell the art, you get to keep it on your wall for as long as you want as there is no way the tax man would know if you ahd any offers and whether you accepted or refuse dthe offers. Plus there is nothing to stop you over pricing the art which would make it harder to sell.
www.ft.com/content/a91a1608-d887-11e4-8a23-00144feab7de
www.theguardian.com/artanddesign/2013/dec/27/tax-exemption-public-access-treasured-artworks-racket
Tax exemption for public access to treasured artworks is 'a racket' UK owners of 115,000 works don't pay inheritance or capital gains tax if they allow public access, but viewing proves difficult
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Deleted
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January 1970
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Tax & buying art, by Deleted on May 27, 2017 15:49:53 GMT 1, VAT registration threshold to remember
Here's a true story.
Someone I know went to buy some imported goods from a location in the UK. A building with storage. Four seperate ltd companies registered at the same address selling the same imported items and all owned by the same person. The four companies combined turnover is over the VAT threshold. The four companies individual turnover is below the VAT threshold. Non of the four companies paid any VAT.
VAT registration threshold to remember Here's a true story. Someone I know went to buy some imported goods from a location in the UK. A building with storage. Four seperate ltd companies registered at the same address selling the same imported items and all owned by the same person. The four companies combined turnover is over the VAT threshold. The four companies individual turnover is below the VAT threshold. Non of the four companies paid any VAT.
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Winks
Junior Member
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April 2016
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Tax & buying art, by Winks on May 27, 2017 16:14:15 GMT 1,
The problem with this you would have to introduce the funds into the company to purchase the stock. The stock on hand would negate the purchase so there would be no losses. In any case if the purpose of this is to save tax, company losses can only be set off against company profits. Not to be set off against personal tax. Kinda pointless
The problem with this you would have to introduce the funds into the company to purchase the stock. The stock on hand would negate the purchase so there would be no losses. In any case if the purpose of this is to save tax, company losses can only be set off against company profits. Not to be set off against personal tax. Kinda pointless
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Winks
Junior Member
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April 2016
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Tax & buying art, by Winks on May 27, 2017 16:16:40 GMT 1, What I thought may be good is if you used your limited company to buy art from the EU, you can get it vat free. B2B EU vat rules.
What I thought may be good is if you used your limited company to buy art from the EU, you can get it vat free. B2B EU vat rules.
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Deleted
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January 1970
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Tax & buying art, by Deleted on May 27, 2017 16:38:39 GMT 1, A benefit of owing an online business is if you are a heavy traveler you would be the ability to write off travel expenses by popping in a gallery each trip or discussing art at your meals.
A benefit of owing an online business is if you are a heavy traveler you would be the ability to write off travel expenses by popping in a gallery each trip or discussing art at your meals.
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Deleted
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January 1970
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Tax & buying art, by Deleted on May 27, 2017 16:45:29 GMT 1, What I thought may be good is if you used your limited company to buy art from the EU, you can get it vat free. B2B EU vat rules. You could just take the art to an EU country. Register an address there and buy it from yourself or any name and take it back to the UK.
What I thought may be good is if you used your limited company to buy art from the EU, you can get it vat free. B2B EU vat rules. You could just take the art to an EU country. Register an address there and buy it from yourself or any name and take it back to the UK.
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Deleted
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January 1970
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Tax & buying art, by Deleted on May 27, 2017 16:47:59 GMT 1, and when in EU pop into Luxembourg and have a word with Jean Claude Juncker over a meal and bottle of wine. He knows all about tax avoidance.
Don't forget when he gets drunk he likes to happy slap people.
and when in EU pop into Luxembourg and have a word with Jean Claude Juncker over a meal and bottle of wine. He knows all about tax avoidance.
Don't forget when he gets drunk he likes to happy slap people.
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Winks
Junior Member
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April 2016
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Tax & buying art, by Winks on May 27, 2017 16:53:11 GMT 1, and when in EU pop into Luxembourg and have a word with Jean Claude Juncker over a meal and bottle of wine. He knows all about tax avoidance. Don't forget when he gets drunk he likes to happy slap people.
Brings new meaning to a slap up meal
and when in EU pop into Luxembourg and have a word with Jean Claude Juncker over a meal and bottle of wine. He knows all about tax avoidance. Don't forget when he gets drunk he likes to happy slap people. Brings new meaning to a slap up meal
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shadowuk
New Member
Posts • 239
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April 2013
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Tax & buying art, by shadowuk on May 27, 2017 18:49:25 GMT 1, the amount of art buys on this website over the threshold (£6000) i would expect everyone on here practically must declare their earnings? People are openly admitting to selling art for £10k, £20k etc etc
what is the percentage someone pays in the UK?
the amount of art buys on this website over the threshold (£6000) i would expect everyone on here practically must declare their earnings? People are openly admitting to selling art for £10k, £20k etc etc
what is the percentage someone pays in the UK?
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andyroo0312
Junior Member
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July 2011
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Tax & buying art, by andyroo0312 on May 28, 2017 1:27:23 GMT 1, Down here if I sold a Banksy at £30k but bought it for £1000 I am supposed to count the profit as income and put it on my tax return All monies down here except gambling wins are counted as potential taxable income. I have a very good friend how works at the tax dept and guilders me on what I can get away with. Which normally is not much. Even tho our 3rd highest tax commissioner has just been down as part of a $160million dollar rip from the tax office. ( only in Australia). Why any one would want expensive art at work I just don't know, just hang decent cheap copies problem solved. Interesting thought I wonder if Penquin claimed Harland Millers canvases back on tax as it could be said it is buisness related. Maybe they rode it of as advertising and in the context of Penquin that would seem fair.?
Down here if I sold a Banksy at £30k but bought it for £1000 I am supposed to count the profit as income and put it on my tax return All monies down here except gambling wins are counted as potential taxable income. I have a very good friend how works at the tax dept and guilders me on what I can get away with. Which normally is not much. Even tho our 3rd highest tax commissioner has just been down as part of a $160million dollar rip from the tax office. ( only in Australia). Why any one would want expensive art at work I just don't know, just hang decent cheap copies problem solved. Interesting thought I wonder if Penquin claimed Harland Millers canvases back on tax as it could be said it is buisness related. Maybe they rode it of as advertising and in the context of Penquin that would seem fair.?
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hhi
New Member
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May 2017
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Tax & buying art, by hhi on May 28, 2017 18:51:05 GMT 1, Not so cluded up at all on doing your own tax returns etc so asking this and it may appear a dumb question and if it is I apologise. If you earn over £43k you have to pay 40% tax, so if I'm earning £80k for example, rather than paying the 40% 'super tax' of £14800 as well as the £8600 20% tax for the first £43k, could I buy £15k of art and claim it back as 'office equipment/decoration' every year? therefore only paying £8600 a year of taxes every year & having a great art collection? No. Is the 15k artwork an intrinsic part or necessity to your business or its running?
Not so cluded up at all on doing your own tax returns etc so asking this and it may appear a dumb question and if it is I apologise. If you earn over £43k you have to pay 40% tax, so if I'm earning £80k for example, rather than paying the 40% 'super tax' of £14800 as well as the £8600 20% tax for the first £43k, could I buy £15k of art and claim it back as 'office equipment/decoration' every year? therefore only paying £8600 a year of taxes every year & having a great art collection? No. Is the 15k artwork an intrinsic part or necessity to your business or its running?
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Deleted
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January 1970
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Tax & buying art, by Deleted on May 28, 2017 19:26:48 GMT 1, Here's a true story. Someone I know went to buy some imported goods from a location in the UK. A building with storage. Four seperate ltd companies registered at the same address selling the same imported items and all owned by the same person. The four companies combined turnover is over the VAT threshold. The four companies individual turnover is below the VAT threshold. Non of the four companies paid any VAT. All fine until the get a visit from an officer. HMRC have the power to combine the turnover of businesses artificially separated to avoid the threshold. Thats true. I'm sure HMRC have a lot of power and could easily just go round taking photos of expensive car registrations and running them through a computer to ind out the owner of a Porsche or similar and then just reference the owners tax declaration.
I guess these cash turnover businesses and multiple bank account businesses often make it not worth the effort for the HMRC as the small amount they could in theory recover won't cover the court costs.
Some people do business within the rules and others exploit the rules.
Here's a true story. Someone I know went to buy some imported goods from a location in the UK. A building with storage. Four seperate ltd companies registered at the same address selling the same imported items and all owned by the same person. The four companies combined turnover is over the VAT threshold. The four companies individual turnover is below the VAT threshold. Non of the four companies paid any VAT. All fine until the get a visit from an officer. HMRC have the power to combine the turnover of businesses artificially separated to avoid the threshold. Thats true. I'm sure HMRC have a lot of power and could easily just go round taking photos of expensive car registrations and running them through a computer to ind out the owner of a Porsche or similar and then just reference the owners tax declaration.
I guess these cash turnover businesses and multiple bank account businesses often make it not worth the effort for the HMRC as the small amount they could in theory recover won't cover the court costs.
Some people do business within the rules and others exploit the rules.
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