[mick partington]

my brother works for tnt and seid thay dont employ a person to clean there 55 trucks as thay can claim back 100% of what thay pay somebody to clean them,
if thats true could housing assocations  [sorry spelling] do the same thay own the houses and the tenents woud,nt have to pay everyone wins ?

[DaveG]

I would of thought "yes" as it would be classed as maintenance

[mick partington]

is that how all  commercial jobs work companys dont mind paying a bit more as thay claim 100 % back from taxman

[EZclean]

you would think so. but they dont think like that, sometimes they still want the cheapest  :

[Sunshine/Cleaning]

my brother works for tnt and seid thay dont employ a person to clean there 55 trucks as thay can claim back 100% of what thay pay somebody to clean them,
if thats true could housing assocations  [sorry spelling] do the same thay own the houses and the tenents woud,nt have to pay everyone wins ?

Do they pay someone to clean them or dont they? Confused by the question.

[mick partington]

my brother works for tnt and seid thay dont employ a person to clean there 55 trucks as thay can claim back 100% of what thay pay somebody to clean them,
if thats true could housing assocations  [sorry spelling] do the same thay own the houses and the tenents woud,nt have to pay everyone wins ?

Do they pay someone to clean them or dont they? Confused by the question.

yes thay pay a sub contracter to clean them thay just dont have an emplee do this as thay would be out of pocket,thay claim all cost back in tax.

[AuRavelling79]

You can claim back employee costs of course. So you have to weigh up the costs of an employee (including N.I.; holidays, sickness, insurance liability and possibly pension) against a contractor.

Schools and larger firms do this all the time and which is why some small low level schools get their caretaker to do the windows (time on his hands and getting paid anyway) and others don't.

[leapstallbuildings]

my brother works for tnt and seid thay dont employ a person to clean there 55 trucks as thay can claim back 100% of what thay pay somebody to clean them,
if thats true could housing assocations  [sorry spelling] do the same thay own the houses and the tenents woud,nt have to pay everyone wins ?

Do they pay someone to clean them or dont they? Confused by the question.

yes thay pay a sub contracter to clean them thay just dont have an emplee do this as thay would be out of pocket,thay claim all cost back in tax.

I think there has been a misunderstanding here.  I believe that what was meant was that 100% of the cleaning bill is a business expense for the company.  i.e.  that amount is deducted from the turnover before calculating profit.  This would mean that the tax bill would be reduced by anything from 20% to 40% of the cleaning bill (depending on rate of tax payable.  There would probably also be a reduced NI element too.

[Ian Lancaster]

my brother works for tnt and seid thay dont employ a person to clean there 55 trucks as thay can claim back 100% of what thay pay somebody to clean them,
if thats true could housing assocations  [sorry spelling] do the same thay own the houses and the tenents woud,nt have to pay everyone wins ?

Do they pay someone to clean them or dont they? Confused by the question.

yes thay pay a sub contracter to clean them thay just dont have an emplee do this as thay would be out of pocket,thay claim all cost back in tax.

I think there has been a misunderstanding here.  I believe that what was meant was that 100% of the cleaning bill is a business expense for the company.  i.e.  that amount is deducted from the turnover before calculating profit.  This would mean that the tax bill would be reduced by anything from 20% to 40% of the cleaning bill (depending on rate of tax payable.  There would probably also be a reduced NI element too.

Exactly.

There seems to be a popular misconception amongst members that if you spend out (say) £100 on services as described above, the taxman will give you £100 back.

No he won't.

All that happens is that you wouldn't pay tax on that £100, so in effect it would only cost you about £78, depending on your total turnover.

I doesn't make much difference whether you use a contractor or in house labour, except that if you are already paying someone who has time to do the job and you pay someone else, then you've paid twice, but whatever you pay is deducted from your taxable profit so you don't pay tax on the money involved.

[EZclean]

if something is a 100% tax deductable like cleaning or hire equipment, then the cost of that item or service is deducted from gross profits for the full value.
in effect a business may as well pay us the £100 for the cleaning service and come the end of tax year that £100 is taken away from their taxable income.

thats how i was told. same thing for van leases.

[Moderator David@stives]

   :   No it doesnt, you just dont get taxed on that £100 just as Ian explained   

[s.hughes]

I would of thought "yes" as it would be classed as maintenance

No, it is maintinance but it has to be shown on the list of things 'TO DO' otherwise they are on their own which is in most cases

[Sean Dyer]

effectively saving you £20 on your tax bill, however you have still spent £100 nobody gives you that back.....unfortunately

Hence, businesses still want the best price.

exactly i have a friend who kept saying, im gonna lease a car because the  taxman pays for it and i said to him, no you pay 5000 a year and dont pay the tax on that money - suddenly he got the point, its only worth spending the money for tax reasons if you dont need it ,so dont wanna pay tax on it and have to invest anyway otherwise pay the percetnage and keep the rest ? or put into a pension - completely 100 % tax free for your money!
Worth thinking about if your near the age where you can cash it in, i think its 55 is the youngest?? But you get something like a 25% tax free lump, and then cash the rest into an annuity which pays a weekly, monthly wage to you for the rest of your time, based on what you gave them... I have a custy who gets a £1000 a week from it 

He put everything into his pension the last few years of his business and then sold up took retirement at 55 ish

[Window Washers]

if you earn £1000 a year and pay tax at 20% you pay £200 tax

if you earn £1000 a year and have an expense of £100 (100% deductable) a year you pay £180 tax

*obviously if you only earned £1000 you wouldn't pay tax cos you would be really really poor