This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Large advertising costs

Edwards88
Posts:3
Joined:Sun Feb 28, 2021 8:43 pm
Large advertising costs

Postby Edwards88 » Sun Feb 28, 2021 8:51 pm

Evening guys hoping this is the correct spot

I run a business and have employed my first staff. All money made by him (and some of my own) goes into advertising. My advertising gets the same value of money back (and more) but then continues to provide monthly work so meaning it continues to earn more money which is again invested into more advertising which is snowballing very nicely.

Anyway two quick confirmations of my thoughts

I am correct in thinking that all advertising is tax deductible? As in I will have no tax to pay because my income is dropped to around 5k per year after all advertising and staff costs are considered. As in my advertising is around 65-70% of my total turn over. (Rapid expansion)

Secondly, when it comes to a mortgage would the advertising be classed as something that is set in stone or would it be ignored considering I can stop it at any point and all work picked up is guaranteed monthly so my income wouldn't drop (I would just stop expanding, income would remain static with small increases from word of mouth)

Thank you

pawncob
Posts:4749
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Large advertising costs

Postby pawncob » Mon Mar 01, 2021 11:48 am

Not sure I understand your business model.
All advertising is tax deductible. Does it qualify as advertising?
Net Profit is used for determining mortgage income level, so advertising can't be ignored.
With a pinch of salt take what I say, but don't exceed your RDA

Edwards88
Posts:3
Joined:Sun Feb 28, 2021 8:43 pm

Re: Large advertising costs

Postby Edwards88 » Mon Mar 01, 2021 12:15 pm

I'm in service industry.. Each time I receive a successful advertising I receive a new monthly job.

So basically every time I advertise I get more monthly income, which again increases my advertising each time. I started with 200 per month advertising, now I'm up to around 900 per month which in turn continues to increase my monthly income which again I just increase my advertising to snowball even further.

At this rate I'll get another staff member in about two months.. Again I'll just use their earnings to advertise more getting me to another staff member faster than the previous

What I mean by it all is the work is already there monthly now, I don't have to advertise to get more work, I only advertise to increase my ongoing work rather than have to advertise to get work for income.. Income is already high monthly guaranteed, then each new successful ad gets me even more guaranteed work

bd6759
Posts:3587
Joined:Sat Feb 01, 2014 3:26 pm

Re: Large advertising costs

Postby bd6759 » Mon Mar 01, 2021 7:11 pm

Each time I receive a successful advertising I receive a new monthly job.

What, exactly, does that mean?

Edwards88
Posts:3
Joined:Sun Feb 28, 2021 8:43 pm

Re: Large advertising costs

Postby Edwards88 » Mon Mar 01, 2021 9:02 pm

I mean each customer I receive through my adverts is an ongoing monthly job. Not a one off job.


Return to “General”