Tax treatment of weddings by a company

[Brendan Burgess]

I would say that it is common, but it's a very dangerous practice for all the reasons which Tommy pointed out.

If you make a once off payment, you will probably treat it ok. But if you pay an expense out of your company, and you don't account for it correctly, by accident, you would be very vulnerable if you have a revenue audit.

It's best to understand clearly the difference between a company and its directors and to manage their affairs separately.

 

[Purple]

There is absolutely nothing unusual in this at all. It happens in tens-of-thousands of companies across Ireland.

One man's normal is another man's nightmare it seems!

I've not worked in practice for a couple of years, but when I did the nominal account with the most activity in some of my small Ltd Co clients was the directors current/loan account..! Guys who had gone from sole trader to Ltd Co and never could wrap their head around the concept that it wasn't still all their own money.

I totally agree with Mandelbrot.

Company credit cards can also be a complete nightmare. It might be year end before you get to sit down with the director and go through all this expenditure.

Why on earth would anyone put themselves in the Revenue's firing line by being that stupid and disorganised?
I would never use company money or a company credit card for any personal bills or payments. Madness.

 

[Bronte]

Why on earth would anyone put themselves in the Revenue's firing line by being that stupid and disorganised?
I would never use company money or a company credit card for any personal bills or payments. Madness.

Madness, well we'll see after Her Majesty's Revenue investigate (Sunday Business Post yestereday). They want to look at all company spending by Sean Quinn. Things are getting a lot hotter in Cavan.

 

[delgirl]

I would never use company money or a company credit card for any personal bills or payments. Madness.

Seems there are people out there who do, i.e. the Stokes Brothers who spent €146,000 in personal expenses on company credit cards while their company was in difficulty, leaving creditors out of pocket. Looks like they got away with it with a very small wrap on the knuckles.

 

[T McGibney]

Madness, well we'll see after Her Majesty's Revenue investigate (Sunday Business Post yestereday). They want to look at all company spending by Sean Quinn. Things are getting a lot hotter in Cavan.

I don't think HM Revenue have any jurisdiction in Cavan?

Seems there are people out there who do, i.e. the Stokes Brothers who spent €146,000 in personal expenses on company credit cards while their company was in difficulty, leaving creditors out of pocket. Looks like they got away with it with a very small wrap on the knuckles.

Those boys' business practices are an example to nobody.

 

[Luternau]

We're not talking normal wedding here, where the daughter of a hotel owner absorbs say the catering and drinks cost which wouldn't be a very large figure really. But a wedding costing a million, wouldn't that be more of a gift tax wise.

It was reported a few months back that a Company, sought to claim the VAT back on the cost of a wedding of a family member of a Director. The company owned the hotel that hosted the wedding and claimed the event was a marketing event.

Full article here;
http://www.independent.ie/opinion/analysis/tom-lyons-daughters-huge-wedding-bill-even-went-to-company-3154398.html

 

[Bronte]

It was reported a few months back that a Company, sought to claim the VAT back on the cost of a wedding of a family member of a Director.

Very interesting Luternau, the link is not working. Did the company succeed in claiming back the VAT?

After one sees Starbucks paying not one pound of corporation tax on sales of millions in the UK, I've a feeling it's a lot more of a gain than VAT via the hotel for this wedding. I'm sure the Quinns have accountants as good as those of Starbucks.

(I'm not inferring any tax evasion - yet, so far tax avoidance - which is perfectly legal)

 

[DB74]

Here's the link

www.independent.ie/opinion/analysis...edding-bill-even-went-to-company-3154398.html

The article states "an attempt was made to reclaim the VAT" but doesn't say whether it was successful or not

 

[Bronte]

I don't think HM Revenue have any jurisdiction in Cavan?

.

You can live in Cavan and do business and declare tax in the six counties. As Quinn does/did.

 

[T McGibney]

You can live in Cavan and do business and declare tax in the six counties. As Quinn does/did.

His application for bankruptcy in Northern Ireland was rejected on the basis that his main residence and centre of business interests were both located south of the border.

 

[smeharg]

His application for bankruptcy in Northern Ireland was rejected on the basis that his main residence and centre of business interests were both located south of the border.

My understanding is that this was the case at the time of the bankruptcy hearing. You need to show your centre of interest being in the UK for atleast 6 months in order to claim bankrupty in the UK, which Sean Quinn was unable to prove (or IBRC were able to disprove).

Quinn headquarters is in Derrylin, Co Fermanagh where Sean Quinn had his office and worked and therefore paid taxes in the UK. If the alleged payments were made from a UK company to its director(s) then HMRC would have jurisdiction regardless of where the director(s) are resident.

 

[Luternau]

Very interesting Luternau, the link is not working. Did the company succeed in claiming back the VAT?

I will fix the link. The article did not state its sucess or otherwise.

I'm sure the Quinns have accountants as good as those of Starbucks.

I think Starbucks paying no corporation tax on UK profits is totally different to this, but I could be wrong on that.

 

[Bronte]

I will fix the link. The article did not state its sucess or otherwise.



I think Starbucks paying no corporation tax on UK profits is totally different to this, but I could be wrong on that.

Ok the link now works. How would the Independant know that the Quinn company tried to claim back the VAT.

My comparison with Starbucks is to point out that the wealthist people and companies can hire the best accountants, who are 'generally' able to keep one step ahead of revenue and therefore these companies seem to get away with paying a lot less tax than one would expect. Revenue have respect for the big 4 accountancy firms and indeed are sounded out by the big 4. To see what can and cannot fly.

 

[Setanta12]

Revenue have respect for the big 4 accountancy firms and indeed are sounded out by the big 4. To see what can and cannot fly.

Supporting link please.

(I think you'll find its the other way around (s.811TCA1997))

 

[Bronte]

Supporting link please.

(I think you'll find its the other way around (s.811TCA1997))

I don't need a link, I was in the office of one of the big 4 firms in the last 12 months (a tricky tax issue) and they have direct one on one contact with the tops in revenue.

 

[T McGibney]

I don't need a link, I was in the office of one of the big 4 firms in the last 12 months (a tricky tax issue) and they have direct one on one contact with the tops in revenue.

You'd have to wonder about the ethics of that sort of carry-on. Its all about who you know.