StevieB
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| posted on 3/1/14 at 06:31 PM |
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Running a race team as a business?
Hi,
Does anyone on here run their racing through a 'business'?
I was giving it some thought and wondered if there was any advantage to be gained through doing so as a stand alone business (ie, any efficiencies on
VAT etc).
I have a limited company registered to me at the moment, which is lying dormant at present and is VAT registered, so I was maybe thinking about
re-purposing the business to make it into a race team (basically so I can go hill climbing and sprinting with some financial efficiencies).
Cheers
Steve
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deeceee09
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| posted on 3/1/14 at 07:04 PM |
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Might be an idea to have a chat with your accountant?
Treachery and old age will always triumph over youthful enthusiasm.
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StevieB
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| posted on 3/1/14 at 07:58 PM |
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I spoke with him a while ago about sponsoring myself, which is a bit of a different premise, and he was a little reluctant on that front as sponsoring
yourself to race a car can look a bit tax-dodgy. He had one client sponsoring himself £50k a year to race his porsche which he said always looked a
bit shades on paper (which is all HMRC will see) - I did tell him that I'm not quite at those stakes yet!
Running a race team (for want of a better phrase) would be a bit of a different proposal, and I will be speaking to him about the possibility, but
just thought I'd ask if anyone is doing the same already.
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daveb666
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| posted on 3/1/14 at 09:43 PM |
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My boss 'sponsors' himself. He has 5 proper race cars, all stickered up in the company graphics. Tow car, trailers etc all belong to the
company. Has done this for many many years, never had any problems and we turn over between £4-6M a year so not exactly 'under the radar'
of the taxman.
2007bc Photography - Commercial and Wedding Photographer based in West Yorkshire
http://www.2007bc.co.uk / http://www.huddersfieldcommercialphotographer.co.uk
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snakebelly
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| posted on 4/1/14 at 02:48 AM |
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What exactly are you looking to gain? If the companys dormant then im presuming theres no money to be had out of it in sponsorship. If tis VAT
registered you could claim VAT back i suppose buti cant really see what you hope to gain? Sorry if im being thick
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jeffw
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| posted on 4/1/14 at 06:55 AM |
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quote:
Originally posted by daveb666
My boss 'sponsors' himself. He has 5 proper race cars, all stickered up in the company graphics. Tow car, trailers etc all belong to the
company. Has done this for many many years, never had any problems and we turn over between £4-6M a year so not exactly 'under the radar'
of the taxman.
Almost certainly there will be a tax implication as a benefit in kind.
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StevieB
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| posted on 4/1/14 at 08:53 AM |
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quote:
Originally posted by snakebelly
What exactly are you looking to gain? If the companys dormant then im presuming theres no money to be had out of it in sponsorship. If tis VAT
registered you could claim VAT back i suppose buti cant really see what you hope to gain? Sorry if im being thick
That's pretty much the top and bottom of it - if you can get VAT back, then you gave a 20% saving over buying parts compared to buying things as
'just a bloke'.
My company has only been dormant for 6 months, and will trade again (though maybe not in the same role as it did before)
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steve m
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| posted on 4/1/14 at 09:48 AM |
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I have no idea about "race sponsorship" but could you not use the costs of running a race car against self advertising your own business,
on said car
as I believe any advertising costs will be tax deductible, and then there will be fuel and clothing and extras to get you and vehicles to the circuit
to advertise your products ?
only an idea
steve
Thats was probably spelt wrong, or had some grammer, that the "grammer police have to have a moan at
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snakebelly
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| posted on 4/1/14 at 10:50 AM |
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quote:
Originally posted by StevieB
quote:
Originally posted by snakebelly
What exactly are you looking to gain? If the companys dormant then im presuming theres no money to be had out of it in sponsorship. If tis VAT
registered you could claim VAT back i suppose buti cant really see what you hope to gain? Sorry if im being thick
That's pretty much the top and bottom of it - if you can get VAT back, then you gave a 20% saving over buying parts compared to buying things as
'just a bloke'.
My company has only been dormant for 6 months, and will trade again (though maybe not in the same role as it did before)
problem is that im pretty sure it wont be legal to trade a limited company as a money losing scheme or it would be insolvent which it would be as it
would have outgoings but no income, unless you intend to dump some money in it as an investor?
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thefreak
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| posted on 4/1/14 at 01:02 PM |
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That's my thoughts. How is it going to [I]make[/I] money?
Using racing as a form of advertising for a company is doable according to my accountant, but the business behind has to be making some sort of
turnover to be able to justify it, oh and have some products to be advertising 
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henryc
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| posted on 16/2/14 at 11:28 AM |
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Interesting this one - I've had many a thought about this and do know some folk who spend 40k+ a year racing through their own companies that
effectively don't make much cash.
Their take on it seems to be - you can have a business, but that doesn't make you a good business person! So if you have business income of say
a few thousand a year and decide to spend it all advertising the company on the side of a racing car and promotional events (ie race events/track
days) then that is your decision as a business. The fact the company makes nothing on paper doesn't seem to be a problem for them. This way,
your business income does not get taxed at 40% on the profit, and you can purchase parts minus the 20% VAT. Personally I don't know the ins and
outs or whether this is OK, but I can see the logic! I think the key thing is though, without any income for the business the benefit doesn't
seem that big.
I benefit from setting myself up as a team (but not as a business) by getting preferential rates when buying parts (as I usually get trade price). I
don't spend nearly enough to make running anything through a business worthwhile for me.
Hope that helps!
Henry.
Never stop tinkering
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