[Roy Harding]

Selling a litter of pups can easily be classed as a hobby. So the situation is different but of course if you were claiming the vet bills, food etc as expenses then yes you would need to declare the sales as income.

When buying a biz, you can only buy physical things, ie premises, stock, equipment in the customers or contracts are only viewed in relation to the value of that biz.

Customers may leave or go elsewhere so cannot be included as an expense

I worked for a company who were brought out for 8 million pounds, the premises was worth about 1 million, machinery a further 1.5 million but we had a full order book and work totalling 6 million
We were brought by a rival US company, and instantly closed down us down.
Basically they paid well over the top to take our work and kill off a rival company, the two owners were happy as they sold a company valued at around 3 million for 8
The tax man didn't go chasing about overpaying for a factory unit and machinery.

There is more than one way to skin a cat.

Darran

Hi Darran

I know what your saying. But if you purchased a round for a £1,000 and then sold it 4wks later for £4,000 you would be taxed on the £4,000 but you have not made £4,000 as you spent £1,000 to acquire it.

I could not see the tax office saying it was good will and keep all of the £4,000. What do you think?

Roy

[Smudger]

I think the point I'm trying to make is you don't buy a round for £1000.

Your buying cleaning equipment for £1000 (included in the sale is some paperwork)

You get a receipt that says you parted with a grand for cleaning equipment it can be listed or not on the receipt either way you have a genuine receipt.

The seller now pays tax on this as income and you have it as an expence then when you sell you pay tax on any profit.

Darran

[martin hulstone]

You cant offset work bought against any future tax bills,and thats that really. If you want to find ways around it do your homework rather than coming on here. The taxman reads these pages you know. lol

[bobplum]

Hi Guys,

I'm buying a domestic round. What would i need from the other window cleaner to put on my books, so i can write it down as an expense? Like an invoice or something?

Thank you

Meridion

Technically buying a round cannot be counted as a business expense even with a receipt.

If your accountant plays exactly by the law that is.

[bobplum]

ITS NOT AN EXPENSE

[Jonny 87]

ITS NOT AN EXPENSE

No need to shout.

 

[Edge Clean]

Are these possible solutions?

The purchase of Marketing mailing lists is a legitimate business, get the seller to sell you his customers as a marketing mailing list.

When you take over a round your not guaranteed to retain all the customers and the only way to know who you have of the list is to contact them all personally and sell your service to them. (that's your marketing angle covered)

Or

Get the seller to sell you the list as a list of customers that he has canvassed for you. Seems that enough window cleaners seem to pay canvassers to go find them work and can write that off as canvassing fees in their accounts.

[Leeds]

I drafted up a receipt for the Waterfed Pole System and Client Database for the price of the total sum. Don't see anything wrong in that. He's declaring it as a sale, and me as a purchase for the business. The tax man can take that as he likes.

[g.brookes]

i have just had this exact problem myself.
i can categorically say this is not an allowable expense for a sole trader.  If you are a limited company then its fine.
I have had countless phone calls with my accountant and the hmrc.  I have a lot of money to pay in back taxes currently, because i was previously advised it was an expense.
Be warned!

[sunshine windies]

Not to contradict anyone.
And I can only speak from my own experience buying my round nearly 12 years ago (so things may have changed)
I could not write down the cost of the round as it wasn't a tangible asset.
But the guy who sold it to me-he had to pay tax on the money I paid him as the money I paid him was income.
That's what we were told. So we didn't do that.
On paper, I bought the van, system, equipment etc for the total cost.
The round wasn't even mentioned in the paperwork.

+1