Purchasing a bike through the company for VAT purposes - creative accounting?

[Pale Rider]

At one time, probably when administration was more localised, which accountancy firm prepared your accounts could make a difference.

Some had a good reputation with the tax office, so accounts from them were more likely to be accepted.

Other accountancy firms were known as stroke pullers, so accounts from them were more likely to be questioned.

 

[Bazzer]

You are not looking to defraud the taxman, but dress up certain comments in quotes.
A couple things to consider:
If you are a genuine partner, the financial buck stops with you.
If HMRC come calling about your creativity, the money you engineered to fund your hobby, may well be dwarfed by the financial costs of defending your actions, even if you are successful.

Oh, and by the the way, HMRC do use social media in research.

Edited to switch the fourth sentence.

 

[fossyant]

As @PaulSB says, HMRC will insist on a download of your accounting and payroll, and their software is designed to look for irregularities. Absolute pain when they turn up, in terms of staff time digging about.

PS you'll get a better discount on a last year's model. I've not bothered with our bike to work scheme since it first came in (I got one many years ago with it).

 

[vickster]

As @PaulSB says, HMRC will insist on a download of your accounting and payroll, and their software is designed to look for irregularities. Absolute pain when they turn up, in terms of staff time digging about.

PS you'll get a better discount on a last year's model. I've not bothered with our bike to work scheme since it first came in (I got one many years ago with it).

Precisely and interest-free finance enables one to pay it off over 1-2 years

 

[Dogtrousers]

As you've already participated in C2W presumably you already have a bicycle and thus have no need for another.

 

[BoldonLad]

I'm impressed, nay humbled, at the height of the moral ground occupied by some contributors to this thread.

Me too. I have had to stop reading it, I am getting altitude sickness.

 

[Deleted member 26715]

it would be interesting to know how many would turn down a £1200 bike if offered for £1000 & to pay it back at £50 a month for 20 months.

 

[Dogtrousers]

it would be interesting to know how many would turn down a £1200 bike if offered for £1000 & to pay it back at £50 a month for 20 months.

That is actually quite a refusable offer. A £200 saving on a bike that I don't particularly want and wouldn't buy otherwise.

I think I'd turn it down.

(20% of 1200 is actually 240, not 200. Still not interested) Edit: I'm an eejit.

 

[Deleted member 26715]

That is actually quite a refusable offer. A £200 saving on a bike that I don't particularly want and wouldn't buy otherwise.

I think I'd turn it down.

(20% of 1200 is actually 240, not 200. Still not interested)

Who said anything about 20%?

 

[Dogtrousers]

Who said anything about 20%?

I thought this was all about avoiding VAT at 20%. Sorry if I misunderstood. (And of course you're quite correct. £1000 bike + 20% VAT = £1200)

Anyway ... whatever the percentage, I'd still turn down the offer. A grand for another bike? I don't care whether it's a bargain or what the payment terms are. I'm not in the market.

 

[vickster]

it would be interesting to know how many would turn down a £1200 bike if offered for £1000 & to pay it back at £50 a month for 20 months.

Legally?

 

[fossyant]

Or even better, find a mate who is selling a hardly used bike for a very good price - did that last year for a bike for Mrs F. Other than the bike being dirty (it was an MTB), a couple of hours fettling, it was like brand new.

 

[DRM]

As @PaulSB says, HMRC will insist on a download of your accounting and payroll, and their software is designed to look for irregularities. Absolute pain when they turn up, in terms of staff time digging about.

PS you'll get a better discount on a last year's model. I've not bothered with our bike to work scheme since it first came in (I got one many years ago with it).

Exactly this, my latest bike was current year, only just, for a couple of weeks, list price was just shy of £1300, they wanted rid, got it for £800, it’s just not worth the hassle of all this creative accountancy really is it.

 

[fossyant]

Exactly this, my latest bike was current year, only just, for a couple of weeks, list price was just shy of £1300, they wanted rid, got it for £800, it’s just not worth the hassle of all this creative accountancy really is it.

Last shop bought bike was £1600 list (last year's model). Bit of a haggle £1000

 

[nickyboy]

Agreed, one person's tax avoidance is another's prudent tax planning.

Except in this case it isn't tax avoidance. It's tax evasion. It's illegal

I've no problem with anyone organising their affairs to minimise the tax they pay whilst remaining within the law. But people who do what the OP are suggesting are stealing from you and me. If someone evades tax it just means that someone else has to pay more tax to make up the shortfall

The idea that evading tax is fair game cos it's just means the IR is out of pocket is bollox