Quote:
Originally Posted by mavayr
I assume you are neither and accountant, nor a business owner?
Using the rate of 20% for Corporation Tax (to keep things simple), you are suggesting that instead of making £1m in profit, paying £200k in Corp Tax, thus making yourself £800k, it is somehow better to only make £500k profit, with £100k in Corp Tax leaving yourself with £400k profit? I am pretty sure most people would ditch the overlay idea, pay some more tax and make double the money!
However, if you had business A that was a profitable events venue, and a separate business B that was a loss making promotional events company, then business A could certainly loan funds to business B in order to keep it solvent, and claim relief on the loans.
Hate the arrogant passive aggressive tone that you always get on 2+2, "I assume XY" when basically what you're saying is just slating what I wrote, whatever though, assume as you wish.
If you read my post, which you evidently did not - I was responding to the suggestion that somehow the idea of reducing overlays by putting people into the tournaments secretly could be a method of being evasive or efficient with your taxes.
OBVIOUSLY, (in the example I gave) it is better to make the £1m profit, pay £200k in CT and finish with a bottom line of £800k, and I never even remotely suggested otherwise. However lets suppose that on the final day of your tax year you found yourself in the position (and undesired position) that were going to overlay a poker tournament for a cost of £500,000. One of few silver linings about this scenario is £100,000 of tax relief (completely genuine tax relief), in essence the overlay costs you £400,000, not £500,000, in terms of real captial.
If they were to then secretly put people in the tournament not only would they lose the tax relief on every buyin but they also would owe duty on the reg fee. Your point about businesses A & B is correct of course but totally irrelevant in the thread.
I'm not saying that this is the reason they wouldn't do as they are accused, what I am saying is, to me, there is no obvious tax benefit to it (which is what people were suggesting) if you, with your superior knowledge of the tax system, could suggest how secretly cutting an overlay with your own money could be in anyway tax efficient then please, share.
Lets see what the next anti PP story the next brand new account pops along with.