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Where Taxpayers and Advisers Meet

Property lease

Herbs16
Posts:79
Joined:Wed Aug 06, 2008 3:53 pm

Postby Herbs16 » Fri Nov 09, 2007 3:55 am

Hi
I have just purchased a hairdressers business and paid £20k for the lease. Is this allowable for tax? Is there any legislation anywhere?
Thanks

Pollard&Co
Posts:70
Joined:Wed Aug 06, 2008 4:00 pm

Postby Pollard&Co » Fri Nov 09, 2007 4:02 am

Is this the same hairdressers which you purchased which also had £20K goodwill?

Review post title "easy question" dated 24 Oct 07.

This is indeed another easy question which you do not appear to know the answer to ?

You also have also been advertising your services as an accountant, I asuume that from your knowledge that you cannot be qualified either by exams or experiance!!! Giving the profession a bad name for people who have spent years training for such positions.


What exactly is your occupation?

Herbs16
Posts:79
Joined:Wed Aug 06, 2008 3:53 pm

Postby Herbs16 » Fri Nov 09, 2007 4:17 am

A simple question, thats all, I do not expect a third degree, You do not know me or my experience. If you feel that way, just ignore the question. Look after your own clients rather than wasting your time fishing for new ones.

Pollard&Co
Posts:70
Joined:Wed Aug 06, 2008 4:00 pm

Postby Pollard&Co » Fri Nov 09, 2007 4:21 am

So tell me are you a hairdresser or an accountant?

Merely protecting the general public from roque traders.

Regards
Matt Allwright
BBC televeision

Herbs16
Posts:79
Joined:Wed Aug 06, 2008 3:53 pm

Postby Herbs16 » Fri Nov 09, 2007 4:26 am

Very funny Stephen form 6 Airedale Place!

Whos telling tales?

davidbarry
Posts:155
Joined:Wed Aug 06, 2008 3:36 pm

Postby davidbarry » Fri Nov 09, 2007 5:23 am

No-one can be certain of giving advice on a lease without siting the contract for the tax consequences flow from these.
Traditionally, leases are viewed as capital and not revenue assets. As a capital asset revenue trading allowances are not admissable for tax. Only the rental payments are allowable as a revenue expense.
Only if there is a disposal of a lease does this trigger a charge and then this would be subject to CGT legislation, subject to the wasting asset rules.
More is needed: eg the length of the lease and whether it can be regarded as an extremely short term asset in which case and only in extreme circumstances construed as a revenue expense.
david barry accountant on 020 8252 7018 or 07877671423

davidbarry
Posts:155
Joined:Wed Aug 06, 2008 3:36 pm

Postby davidbarry » Fri Nov 09, 2007 5:36 am

May I add a caveat to the above. Should be successful in your purchase of £20000, please make sure you detail how the deal was financed. You may not be a bookkeeper ans so therefore take a blank sheet of A4 paper and write down from whence you financed the deal: eg 9 November 2007, £5000 from ISA account: sort code etc etc account number etc etc.
This transaction may sit on your balance sheet as capital account and the Revenue are always interested on the sources of finance for all deals in excess of £2000. As the years pass by you may mentally forget ( unless you are very lucky) from where you obtained the funds. Besides it makes it easier to compute future revenue claims.
regards david barry accountant on 020 8252 7018 and 07877 671423

Mano
Posts:24
Joined:Wed Aug 06, 2008 3:52 pm

Postby Mano » Fri Nov 09, 2007 8:14 am

Dear Davidbarry

You've just gone an spoilt the position Pollard & Co had taken....we must not help rogue traders and unfortunately, the problem exists in accountancy profession as well as building trade!!


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