Limited company funding lifestyle

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MelF

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My wife is complaining that our limited company should be funding our lifestyle - she's falling under the influence (literally) of Irish Instagrammer types- this woman mentioned in the article below in particular - who seem to be living the high life, going on lavish and wildly expensive holidays, huge houses, parties etc and writing it all off for business purposes, while taking out directors loans etc yet funding all through a lot of business debt, or so it seems.

businessplus.ie

Pippa O'Connor's lifestyle business makes second successive annual loss - Business Plus

Photo: Pippa O'Connor. (Pic: Brian McEvoy)
businessplus.ie businessplus.ie

I don't understand it myself - was under the impression that Revenue were very strict about these things but it seems not given the debt level this lady appears to have racked up. 1.6m in 'adminstrative expenses' seems like a stretch to me for an online business. To clarify, I don't agree with my wife, but are we the fools for doing things by the book and living within our means when this kind of thing is allowable in Irish business circles? Presumably the company will eventually just fold and the taxpayer picks up the tab.
 
Yes, but latest accounts are y/e 2021 so miles overdue which would make you wonder about what's gone in in meantime, since online retail was at its peak post-Covid. I just find all this lifestyle spending baffling when the rules are clear enough. Or why banks would be lending to them with accounts in that state.
 
MelF said:
... would make you wonder about what's gone in in meantime, since online retail was at its peak post-Covid.
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Don't know about that person's online business but apparently online shopping and e-commerce is bigger now than the post lockdowns spike.
 
Those accounts are for the financial year ending 31 October 2021. There were received in May 2026. That in itself should send alarm bells ringing. Accounts should be received within 9 months of the end of the financial year end.

Whether you can claim expenses through your business you have to assess

"whether the expense has been expended wholly, exclusively and necessarily in the performance of the duties of the employment/office"
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If Pippa O'Connor is going on holidays and claiming it as a business expense, she will find herself in hot water with the Revenue. Bringing clients out for a meal, while it can be paid for through the company, it is not a deductible business expense. Owning a company, you have fiduciary responsibilites and that is whether you own a company employing 1,000 staff or just one, you still have directors responsibilites. You cannot fund your lifestyle through the company, in what is pre tax money. The Revenue will come down on you like a ton of bricks. If you have an accountant, they will pick you up on this and should stop it. As a financial advisor, I have to have audited accounts every year, so there's no hiding.

Tell your wife to look up what happened to Christian and Simon Stokes who funded their lifestyle through their business.
 
Steven Barrett said:
Tell your wife to look up what happened to Christian and Simon Stokes who funded their lifestyle through their business.
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From what I could find online.

In 2018, their parents consented to a judgment for debts of €12m owed to Dunbar Assets, formerly Zurich Bank, and saw the debt written off in return for a one-off payment of €145,000

They did alright in the end to be fair!

Yes, I thought the same re very late filings, 5 years? Why the heck haven't they been audited? I had to make a declaration to the district court one year when my accountant failed to register mine because whoever was responsible had gone on maternity leave and no fault of my own!

And to be clear, I wouldn't dream of doing anything like it, but I'm a bit taken aback by how it seems all too easy to get away with, judging by that case you mentioned, and the NAMA lads of the same ilk around that time too.
 
ClubMan said:
Presumably one can obtain the BOPOC accounts/returns filed with the CRO and study them to figure out what they're doing?
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Id guess they're a small company, so it'd just be the balance sheet which might not give too much edifying information.
 
Nearly €4M annual turnover is hardly peanuts. The sports club and company limited by guarantee that I'm a member/shareholder of is in that ballpark and files fairly detailed accounts (on time).
 
MelF said:
In 2018, their parents consented to a judgment for debts of €12m owed to Dunbar Assets, formerly Zurich Bank, and saw the debt written off in return for a one-off payment of €145,000

They did alright in the end to be fair!
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That's their parents, different debts!

The brothers companies went in liquidation and their were barred from being company directors.
 
MelF said:
she's falling under the influence (literally) of Irish Instagrammer types- this woman mentioned in the article below in particular - who seem to be living the high life, going on lavish and wildly expensive holidays, huge houses, parties etc and writing it all off for business purposes, while taking out directors loans etc yet funding all through a lot of business debt, or so it seems.
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Pippa O’Connor’s lifestyle empire racked up a €268,000 loss, as company debts mount to more than €2m, writes Niamh Walsh.

It's a pity your wife is being influenced by this. We are getting only a partial story and that story is 5 years old. Does your wife really want accumulated debts of €2m?
 
Some years ago a friend of mine asked me to look at his business as he said he was losing money. His business had struck me as well managed and successful. He was well regarded by his clients and his competitors.

For a few years he made profits before Director's salary of about €200k and took that out and, after taxes, spent most of it.

But his business had a quiet patch. He had profits before Director's salary of €100k. But he continued to take out €200k so he thought he was losing €100k. And, to be fair, that is what the accounts reported. He had no choice but to take less out and cut back on his lifestyle.

And I have seen the same pattern a few times. People taking out more than they are earning and then getting into trouble.
 
MelF said:
My wife is complaining that our limited company should be funding our lifestyle - she's falling under the influence (literally) of Irish Instagrammer types- this woman mentioned in the article below in particular
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Business Plus is now owned by the Daily Mail group. That says enough.

"Admin" expenses include everything from marketing to paper bags and utilities. It can be substantial.

It would be highly unlikely Pippa O'Connor would take a risk of ruining her exceptionally curated "brand" by funding a lifestyle via the company accounts. Their accountants also would have serious regulatory issues if they permitted that too.


Pippa O'Connor has earned well over the years and likely is well able to afford her lifestyle.

Less reading of Daily Mail publications is my advice :D :D
 
MelF said:
My wife is complaining that our limited company should be funding our lifestyle - she's falling under the influence (literally) of Irish Instagrammer types- this woman mentioned in the article below in particular - who seem to be living the high life, going on lavish and wildly expensive holidays, huge houses, parties etc and writing it all off for business purposes, while taking out directors loans etc yet funding all through a lot of business debt, or so it seems.
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You've made a fairly massive leap there to suggest she is funding it through her company.

She has a lifestyle company, not a company to fund her lifestyle.
 
peemac said:
Their accountants also would have serious regulatory issues if they permitted that too.
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But if accountants are that strict, why are they only posting accounts from five years ago now? As Steven says above, seems like a major red flag. But that entire Stokes family ... no words, apples clearly didn't fall far! Agree influencers are a scourge but so many ordinarily intelligent people seem to fall under their spell.
As it is, I get the heebie jeebies if I mistakenly tap the business card to tap for parking, so def no fear of me doing a Pippa O'Connor on it! ;)
 
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