Credit card interest

[lame plumber]

well explained Ray, a lot of folk dont see the whole picture, especially with vat and do I dont I

 

[rpm]

OK, let us keep it simple and go with your initial observation that it leaves the new business with a better cash flow than those paying their monthly balance in full.
But it comes with a price. The more their CC balance grows, the more interest they have to pay. So long as the interest is incured in the process of doing business, it is tax deductible. But the downside is that the business owners/proprietors will have less money to pay themselves as most of the profits will be eaten up in interest payments. So no body wins (except the CC co). Taxman gets no payment, owners get no money to go on holiday, and before long, the overspend leaves the new company in trouble and they soon go bankrupt

Way yer go Lewis and as for Rosberg well.....
VI you really baffle me with some of your posts and I`d really like to sit down and chat over a beer but I never go to London nowadays so that ain`t gonna happen anytime soon.

 

[Nostrum]

Basically any interest you pay is coming out of your profits but as it is an expense you can also claim tax relief on. Ray has explained tax relief well above.

I've met many people who believe that if they buy tools or even fuel then they don't have to pay for them because they are tax deductible so they'll get all the money back at the end of the year from the tax man!

 

[Ermintrude]

A handy pointer .... If your slippers are stupid enough to take Amex get a platinum card....... You get 7% cash back on all purchases!

Or a Barclays reward card. I gets 5% on all transactions

That's £300 a month for using a card!

 

[Millsy 82]

My dad/accountant tried to explain how tax works and he went on for ages about this and that and confused the hell out of me. I said I thought it was I have my turnover take my expenses out of that and then I pay tax on what's left. Now I think he got fed up of my stupid questions so just replied kind of.

I was pleasantly surprised at what you can claim.

 

[stevetheplumber]

My dad/accountant tried to explain how tax works and he went on for ages about this and that and confused the hell out of me. I said I thought it was I have my turnover take my expenses out of that and then I pay tax on what's left. Now I think he got fed up of my stupid questions so just replied kind of.

I was pleasantly surprised at what you can claim.

that is basicly correct you only pay tax on what you draw out of the company so income less expenditure leaves you with profit if interest on a credit card has been charged in connection with the buisness that is an expenditure as ray pointed out you have still paid out for items whithin your expenditure so that amount is now missing from your profit

 

[stevetheplumber]

thing is with lease vans its never yours and you have to return it in good condition ive seen a few vans disapear in the run up to return time

 

[brum]

thing is with lease vans its never yours and you have to return it in good condition ive seen a few vans disapear in the run up to return time

I leased a van years ago transit 6 months old 46.00 per week was a very shrewd move at the time
this was my theory " why do you buy a drill ? " you don't need a drill you need a hole.
Why do you need a van ? simple best part is you could at the time purchase for peanuts at end of term or get another ,my opinion would be to sack it before it costs money and get a new one all tax deductible of course..brum

 

[cr0ft]

I considered a lease van for our new van but decided against it in the end. The cost per year of leasing a new van vs owning an older (but still reliable) van just wasn't worth it to me. Throw on the other downsides of leasing i.e. most companies sting you for charges when you return it, unable to signwrite it without having the ghosting removed after and it's not worth the hassle imo.

Would be different if you had a large fleet, at that point management of the fleet becomes an issue if you own a lot of 2nd hand vans. For small business I'm not convinced leasing is the way to go. Just my opinion.

 

[brum]

Hi croft twas 1989 when I leased my van things will have changed by now but it was more tax efficient to do so then I was going to buy a new transit my accountant steered me toward leasing.
If I did not have any skeletons in cupboard may well go back down same route vans do not have to be brand new and signwriting now is vinyl easily removed back in 1989 it was actually painted on.
I think ill stop now beginning to feel like a dinosaur..brum