Tax Question?

[Rowland]

I am pleased people have this mind set as it makes it so much easier to undercut them on price and achieve a higher profit margin.

You stick to your business plan and I’ll do mine it’s no problem to me ?
You keep your costs 20% above mine

 

[renewablejohn]

You stick to your business plan and I’ll do mine it’s no problem to me ?
You keep your costs 20% above mine

But as a share farmer I dont have any of the costs your talking about thats covered by the farm. I just process the timber using there machinery FOC then sell the logs. So no my real costs is only my time and tea bags.

 

[d williams]

But as a share farmer I dont have any of the costs your talking about thats covered by the farm. I just process the timber using there machinery FOC then sell the logs. So no my real costs is only my time and tea bags.

Be careful there
Had a vat inspection earlier this year and he strictly mentioned that working with others needed paper work invoices for each other working bits and pieces off against each other was a definite no no

 

[Rowland]

But as a share farmer I dont have any of the costs your talking about thats covered by the farm. I just process the timber using there machinery FOC then sell the logs. So no my real costs is only my time and tea bags.

Well I have had to buy everything I use and run and maintain it . It’s a costly business .
New processor is £20-£25 K add 20% to that and you soon become vat registered.
As you have no costs you can undercut everyone. But as you have no costs it’s all profits you in theory pay more income tax .
But I tell others is that I don’t understand why you sell cheeper than me as I sell a lot at my more expensive price. They could get more but for some reason they still sell, say a dumpy bag similar to mine for £45/£50 .Thats a fair bit less than me .

 

[renewablejohn]

Be careful there
Had a vat inspection earlier this year and he strictly mentioned that working with others needed paper work invoices for each other working bits and pieces off against each other was a definite no no

Been there done that had the HMRC Tribunal and won. Dont think they will try it again in the near future.

 

[egbert]

Hi All,
My question is goods for resale, I have bought a large amount of firewood in the last few years
and we always sell it
so will this year's outlay come directly off my gross profit for the year?
Thanks

irrespective of all the above....
i would say you're carrying a stock of material, so your assets each year should be showing this.
Handily, the revenoo won't be very good at measuring notional stacks of firewood, so you in fact use your stock valuation to massage your balance sheets.
If you've had a good year, you can let the declared stock fall a bit, offsetting revenoo issues.
If it's been a slack year, show the stock creeping up, giving you leverage for another year.

And don't be afraid of the purchase price being dragged in. some of your logs have been processed and dry stored, which has increased their value, while others might've suffered from some rot and woodworm, lowering their value....depending on how your year looks like having gone.

(this is not advice, or statements of my own wicked intentions....any similarities to actual practises are coincidental)

 

[Lincsman]

IIRC a local plumber is quite selective with his work, so he stays below the threshold, makes him 20% cheaper than the competition automatically, customer buys the materials directly but he can't claim on his tools and equipment, which wouldn't be a great loss compared to fencing kit.

So he does not pass on his van and fuel costs?.. generous of him

 

[renewablejohn]

Well I have had to buy everything I use and run and maintain it . It’s a costly business .
New processor is £20-£25 K add 20% to that and you soon become vat registered.
As you have no costs you can undercut everyone. But as you have no costs it’s all profits you in theory pay more income tax .
But I tell others is that I don’t understand why you sell cheeper than me as I sell a lot at my more expensive price. They could get more but for some reason they still sell, say a dumpy bag similar to mine for £45/£50 .Thats a fair bit less than me .

As I said being commercial woodland there is no income tax to pay. Just for the record I actually sell at a premium as I do solar kiln dried timber at 125 per IBC container which I recycle the containers so dont have bag costs. No point in selling cheaper as I would not be able to cope with the volume.

 

[devonbrion1998]

irrespective of all the above....
i would say you're carrying a stock of material, so your assets each year should be showing this.
Handily, the revenoo won't be very good at measuring notional stacks of firewood, so you in fact use your stock valuation to massage your balance sheets.
If you've had a good year, you can let the declared stock fall a bit, offsetting revenoo issues.
If it's been a slack year, show the stock creeping up, giving you leverage for another year.

And don't be afraid of the purchase price being dragged in. some of your logs have been processed and dry stored, which has increased their value, while others might've suffered from some rot and woodworm, lowering their value....depending on how your year looks like having gone.

(this is not advice, or statements of my own wicked intentions....any similarities to actual practises are coincidental)

Thanks...Yes I have taken a look Today there is about 150m left of the timber stack which is about half, so I have entered a stock take to that effect