[steve k]

I remember reading elsewhere about an actor (I think) and in his book, he was explaining about how at the end of a tax year, his accountant would say to him:
"I have done your books and this is what you will have to pay in tax...what I suggest you do is purchase a house in LA and we can offset it as a deductible expense..." or words to that effect.

In our world, what he was saying is, if for example you do your books for the April return and you work out that you will be owing (eg:) £3000 to the taxman...would it not be sensible to take that £3000 and go off to Brodex, Omnipole or whoever and purchase items for your business to that amount such as trolley, poles, resin etc.
These items then become allowable expenses and you now owe a lot less in tax and have updated all your gear.
You will not be out of pocket either as the money spent would have been going to the taxman anyway ??
Anyone had any advice as to this off their accountants.

[Paul Coleman]

I remember reading elsewhere about an actor (I think) and in his book, he was explaining about how at the end of a tax year, his accountant would say to him:
"I have done your books and this is what you will have to pay in tax...what I suggest you do is purchase a house in LA and we can offset it as a deductible expense..." or words to that effect.

In our world, what he was saying is, if for example you do your books for the April return and you work out that you will be owing (eg:) £3000 to the taxman...would it not be sensible to take that £3000 and go off to Brodex, Omnipole or whoever and purchase items for your business to that amount such as trolley, poles, resin etc.
These items then become allowable expenses and you now owe a lot less in tax and have updated all your gear.
You will not be out of pocket either as the money spent would have been going to the taxman anyway ??
Anyone had any advice as to this off their accountants.

I have spoken to my accountant about this before and done what you sugested to a limited degree.  It's OK up to a point but it has it's limits - partly because you would be in a similar situation the following year.  Also, unless you are going to be needing an item in the near future anyway, it is better to focus any spending on non capital items - i.e. items where you get the FULL tax relief on the date you spend the money.  If you don't, you could find that the immediate tax relief is a lot less than you anticipated.  If I'm going to have an end of accounting year spend-up, I do mine in September as my accounting year runs from October 1st.  I have done things before like bringing my van service forward by a week, topping up with diesel on September 30th, buying a load of scrims (I was trad at the time) and a new extension pole.  This sort of thing is fine if you have plenty put aside to cover the tax bill.  It is not fine if you are struggling to pay it though (obviously).

[KarlJones]

if for example you do your books for the April return and you work out that you will be owing (eg:) £3000 to the taxman...would it not be sensible to take that £3000 and go off to Brodex, Omnipole or whoever and purchase items for your business to that amount such as trolley, poles, resin etc.
These items then become allowable expenses and you now owe a lot less in tax and have updated all your gear.
You will not be out of pocket either as the money spent would have been going to the taxman anyway ??

Well, if you will be owing 3000 to the tax man you must remember that spending 3000 will not reduce it to nothing.  Unless of course your paying 100% tax

I always think of Tax and NI as being 33% as it is nice and easy to work with in my head though of course it is less.  So if you spent 3000 you would save 1000 off your tax bill + Nic bills.

Technically, if you are going to buy something big, then it makes sense to do it at the end of a tax year rather than the beginning. This is just because you actually KNOW what profit you have made where as the previous year is a best guess.

Bird in the hand ect.