right, soooo ive been thinking of setting up a small time business venture for a while but not really made any major steps towards it. recently my car got broken into and robbed over alot of bits and needs (i want to give it) a rebuild, and need a gauage/workshop/lock up to do it in.

a thoughts crossed my mind about paying for the unit/workshop/lockup earlier. i know that i can claim back money from the inland revenue/goverment for money ive spent investing in the business. for example i buy £100 worth of tools for the business, i can claim it back? that correct?

would this work the same with a property then? in that if i was running a business, could i claim back the money i pay for rent/mortgage of a property that i do business from or use to make money from?

its just that if this is the case then i can set up a limited company, call myself xr-stus autos or whatever, go and rent out a small inductrial unit and then claim back the rent/lease money, essentially bagging a free/cheap workshop? and also finally get myself into business....

any help would be top! cheers fellas!

 

no one?!

 

well the business can pay for it, but ultimatly that will still be you. You can claim back tax on lots of things thou, as long as you are vat regisitered. Lot of the time with small businesses its not worth being registered straight away thou, as you wont be taking much.

 

If you start up a business you only need to register as selfimployrd or small business and tou can clam back the tax on any thing you buy like workshop, tools, phone and heating ect up to a turn over of £52000 a year over this you have to register for vat.

 

so ultimately, no i cant claim back any of the cost of the property back right?

cool, was just a thought!

as for claiming VAT back, i was told you could claim back the entire ammount, not just vat? sounded alot to me but wasnt sure...

 

dont think if you buy summit for 100 quid you will get it back, you wont, its just reduces your year end taxable profits basically, too late to explain it properly but alot of ppl think mint ill buy this that and the other and it will be free

 

yeah thats basiclly how it was explained to me, didnt seem quite right but never thought owt else of it tbh!

 

basically you have a pile of invoices for stuff you sell and a pile of stuff you bought, Now you also get allowances for rent,electric,fuel etc so basically keep every single bill, then take cost away from income received = profit (taxable) if its mega high splash out on tools etc if you can afford it etc and then your taxable profit has dropped, Great ppl think ive saved money but youve just spent x amount of cash on whatever, i know alot of ppl who still buy stuff they dont need trying to drop there tax bill and dont realise they would have had more cash by just paying the tax owed

 

alot of confused people on here - VAT is not the same as TAX dont confuse the two.

 

And you don't get to offset all the cost of the things you buy for use in your business - you get Writing Down Allowances. So if you buy a toolkit for use in the business for £100, in the first year you can claim WDA of 25% of this (£25) to set against your profits. If you don't make a profit it is of absolutely no use to you (except that losses can carry forward until you do make a profit a few years down the line at which time they can offset that profit and reduce the tax payable then).

Some assets get special rules from time to time - eg 100% first year allowance was given on IT equipment a few years ago to help encourage high-tech investment.

 

Also remember that if you are going to be claiming VAT back on bits and bobs (if you do go vat registered) then you'll also have to pay the VATman the money you make on your turnover. Hopefully you will be making profit so theoretically youll be paying more back anyway!

Its a lot dearer than you have been told Stu!!!! Call me if you want to char (and still got these rolls of vinyl here for your mate!)

Cheers
Chris