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If you run your own company you have many opportunities to turn your normal purchases into business expenses. At least in the UK: * Dividends pay less tax tha

If you run your own company you have many opportunities to turn your normal purchases into business expenses. At least in the UK: * Dividends pay less tax than income. * Any work related equipment is a deductible expense. Includes computer, mobile phone, etc. * A company car, particularly an electric one, is much cheaper than buying a car as a private individual. Those are just the basics.

still_grokking 4y ago
And all of those "tips", besides the dividends thing, are actually tax fraud. I know "everybody and her mom" is doing it, but it's still fraud. If you get caught it could have quite bad consequences.
- noelwelsh 4y ago
  Nope. E.g. here is HMRC's page on providing a mobile as a benefit: https://www.gov.uk/expenses-and-benefits-mobile-phones/whats-exempt https://www.gov.uk/expenses-and-benefits-mobile-phones/whats... Nothing to report if the company provides one phone and the contract is in the company's name.
  - still_grokking 4y ago
    I'm missing the part that says that the employee is allowed to use such phone primary for private means. Of course a company (or legal entity for that matter) can get some tax benefits. That's not the point. The fraud is when you declare to buy / use something for the company but use it privately. You just lying about the expenses. Like I said, I know that "everybody" with a company does that. But in their position I would not tell anybody openly as this is quite clearly tax fraud. In Germany this is even more complex as you can use some things in parts privately. But than things depend on how the "exact percentage" of private use is… Of course nobody can really effectively control such things. The laws are actually made to help "some special people" to avoid paying taxes. But things are very complex, and it's very easy to commit tax fraud by trying something like that without professional legal backing. For that reason there is a whole "industry" helping people to avoid taxes! But by just buying stuff "for your company" and using this stuff privately you will get in trouble pretty soon. I don't think this is different in any country.
ASalazarMX 4y ago
Aren't there conditions? for example, in Mexico a company car must bear a logo of your company, and be used for company business at least half the time IIRC, otherwise it counts as a personal car. Business travel and clothes are also limited to sensible business needs, you can't your sky resort vacation as a business expense... well, you can, but if you're audited it will be very unpleasant.

still_grokking 4y ago

And all of those "tips", besides the dividends thing, are actually tax fraud. I know "everybody and her mom" is doing it, but it's still fraud. If you get caught it could have quite bad consequences.

noelwelsh 4y ago
Nope. E.g. here is HMRC's page on providing a mobile as a benefit: https://www.gov.uk/expenses-and-benefits-mobile-phones/whats-exempt https://www.gov.uk/expenses-and-benefits-mobile-phones/whats... Nothing to report if the company provides one phone and the contract is in the company's name.
- still_grokking 4y ago
  I'm missing the part that says that the employee is allowed to use such phone primary for private means. Of course a company (or legal entity for that matter) can get some tax benefits. That's not the point. The fraud is when you declare to buy / use something for the company but use it privately. You just lying about the expenses. Like I said, I know that "everybody" with a company does that. But in their position I would not tell anybody openly as this is quite clearly tax fraud. In Germany this is even more complex as you can use some things in parts privately. But than things depend on how the "exact percentage" of private use is… Of course nobody can really effectively control such things. The laws are actually made to help "some special people" to avoid paying taxes. But things are very complex, and it's very easy to commit tax fraud by trying something like that without professional legal backing. For that reason there is a whole "industry" helping people to avoid taxes! But by just buying stuff "for your company" and using this stuff privately you will get in trouble pretty soon. I don't think this is different in any country.

ASalazarMX 4y ago

Aren't there conditions? for example, in Mexico a company car must bear a logo of your company, and be used for company business at least half the time IIRC, otherwise it counts as a personal car. Business travel and clothes are also limited to sensible business needs, you can't your sky resort vacation as a business expense... well, you can, but if you're audited it will be very unpleasant.