[gollo]

Hi to all you WC's out there. This is my first post on the site having just taken up WCleaning after being made redundant from my previous job. Have found site to be very helpful & informative. So far have got myself about 20/25 customers & am going to buy existing round to give me a platform from which to build on. The seller has introduced me to his customers so I know they exist. Should I be obtaining any paperwork or signature from him, when I hand over the payment, to say that he has sold me his round. Any advice would be  appreciated.

Gollo.

[pjulk]

Ask him for a receipt and put it down as a business expense.
And then its also in writing

I think as he has taken you round to meet his customers that you will not have to much to worry about.

Paul

[macc]

Hi Gollo.

I would suggest you pay 50% up front & balance after first clean.

How many cleans are you paying for it, i would never pay more than 3x.

Macc

[matt]

Ask him for a receipt and put it down as a business expense.


Paul

my accountant said the IR would NOT accept it as a expense, something along the lines of "your not really buying anything " as its just a goodwill payment

[matt]

my advice

get a list of the work and the prices

you have met the customers, so thats a good sign

i would try and see if the guy will let you work it with him ONCE, that way you can earn 50 % of the taking ( he can knock it off the bill ) and you will pick up advice and valuable tips

i only ever pay the rounds worth, so 500 quid worth of work it 500 quid, as the guy wants to sell, you want to buy, i have been lucky though with that

[gollo]

 Thanks guys. Paul, I will definitely obtain a receipt so that I can check with an  accountant if it can be deducted as an expense. Macca &Matt, it is a fairly small round for which I'm paying 1/3 of annual turnover so I think it's quite a good deal. I suppose the sale of a WC round relies on trust in the main but wasn't sure if it was usual practice,  when buying a round, to obtain a written undertaking from the seller that he won't revisit his customers to clean their windows.Am I being too cautious?

Gollo

[AuRavelling79]

Any work/goodwill I have bought goes down as a business expense! At the very least it's an introduction fee. Conversely, when I have sold bits and pieces of work I have put it down in the income column.

[Paul Coleman]

Ask him for a receipt and put it down as a business expense.


Paul

my accountant said the IR would NOT accept it as a expense, something along the lines of "your not really buying anything " as its just a goodwill payment

I'm wondering if you ought to consider getting a different accountant.  Surely it is reasonable to regard this as purchasing a part of a business (the customer list part).  I don't know about offsetting it all in the year you pay it as it is possible to regard it as a capital outlay (depending how you define it) but I would certainly think of it as a business expense.  I'm sure the IR would want to tax you on it if you were the seller.

[Paul Coleman]

Ask him for a receipt and put it down as a business expense.


Paul

my accountant said the IR would NOT accept it as a expense, something along the lines of "your not really buying anything " as its just a goodwill payment

I've had another thought on this too.  If say you had a business hat did mailshots, you often have to pay to get up to date lists which would be a business expense.  I feel that this has no real difference to buying a work list.

[matt]

The Shiner

im just passing on what she said

[dai]

If it were the other way around,and you sold your round for £3000.
I'm sure the tax man would like to know about it.
You try telling him that it doesn't count as income, because you were only selling good will. I'm sure his heart would bleed for you. Dai

[macmac]

my accountant told me the same, it's NOT tax deductable, cos it's goodwill that your paying for. just remember that it's YOU that is responsible for any tax issues, NOT the accountant. he only works with what you give him, so at any time in the future the IR could want some money back ( + loads of interest) if indeed my & matt's accountants are correct.

[Paul Coleman]

The Shiner

im just passing on what she said

I am surprised that your accountant gave that advice.  I will be seeing my accountant next week to finalise the books for 05-06.  I think I'll ask him about it in case there is some obscure reason why this is not a tax deductible expense.  Sounds odd to me.

[dai]

If you were to employ door knockers to help build your round,  would it be classed as an expense?
What's the difference between buying a round, and employing door knockers?
If paying for good will is not deductable, then selling it should not incur a tax liability.
Do the people that run door knockers not have to pay tax then?
A strange one this. The tax man can't have it both ways. Or can he? Dai

[pjulk]

Well if building rounds and selling the goodwill is tax free i'm giving up window cleaning and going round building

Paul

[matt]

The Shiner

im just passing on what she said

I am surprised that your accountant gave that advice.  I will be seeing my accountant next week to finalise the books for 05-06.  I think I'll ask him about it in case there is some obscure reason why this is not a tax deductible expense.  Sounds odd to me.

fair enough, it seems that accountants will let it go though, BUT if you get investigated then will the IR ? ? ? ? ?

i dont know, as i said, i was told this, as i had 2 fair sized receipts for work i have paid for

[macmac]

if it was work that had proper signed contracts from clients i.e. commercial work that guaranteed income for a set period of time i think it would then be tax deductable, cos you are buying something with proof that may be legally binding, but with a domestic round it's the good will of each customer that your buying- and thats not guaranteed nor proofed. i remember the accountant explaining something like the above to me as i was peed off i couldn't put 3k of domestic work that i'd bought down as an expense.

tony

[WavieDavie]

i remember the accountant explaining something like the above to me as i was peed off i couldn't put 3k of domestic work that i'd bought down as an expense. Huh

You've bought it, you have a receipt, it's a legitimate "cost of goods sold" - end of story.

If you paid a fee to an employment agency who supplied you with a member of staff, would your accountant not allow that as a legitimate expense? How else did they treat it, did they put it down as drawings?

[macmac]

cost of goods sold?? what goods?? read again. it's good will not goods sold.

someone shud investigate this issue, for if my accountant is indeed correct some people could find themselfs in a spot of bother, if however he's wrong, i'm gonna break his ****ing neck!!!

[macmac]

as for the agency scenario- that would be contracted, like i said read again