Cyprus-Forum.com

[Londonrake]

May I take this opportunity to say that I have now been on Paradise Island for almost 5 Years

It probably seems a lot longer to some on the forum Milti.

[Lordo]

Let's not forget my OWN invention of Covid avoidance, or is it Covid ...evasion ?
BORED = Bottle Of Red Each Day.
May I take this opportunity to say that I have now been on Paradise Island for almost 5 Years
I'm the happiest man on Planet Earth. Love Cyprus, Love the people, Love the weather but ...HATE FUCKING DRIVING BY DONKEY RIDERS

That is the only thing I envy you for but my time will come and I will actually live amogst my people once again. Not long left now.

[Paphitis]

Mate the first thing you have to learn is the definition of Expenses and Expenditure. They are two totally different entities. Whilst an expense is a PL. entry Expenditure isn't.
If I bought a car using company's money, and provided the car was to be used solely for my company's business then the VAT as well as other vehicle expense could be classified as a legitimate expense, and the VAT could be reclaimed on the VAT return. If however the vehicle was purely for my use, ie driving from and to work then no expense could be legitimately claimed. If s company purchases any machinery , tools or other equipment necessary for the company's operations then this EXPENDITURE is NOT an PL. legitimate expense but a Balance sheet item part of Capital equipment
Depreciation can of course be an expense.
Many accountants at times are at loggerheads with directors on such matters.

Yes legitimate.

But what happens is Directors buy all their vehicles using company money and register the vehicle under the company. Only draw back here, is insurance is dearer.

So the vehicle becomes a legitimate expense. Everything from fuel, to maintenance, insurance and registration.

You are correct, that this is legitimate as long as the vehicle is used solely for company purposes. But the reality is different. The vehicles are not used solely for company purposes alone. Especially if you are a tradie.

The vehicles are used for all of the Directors private purposes, including family vacations. It goes further than that. If the Directors are smart, they find a conference or a supplier to meet up at their holiday destination. Holiday travel will then become a company tax deduction. All sorts of tricks.

There are plenty of hot utes around all registered under a company. I'm talking about high end stuff which a business would not buy but because its the bosses/directors car, they are bought.

[Paphitis]

How may companies order millions for equipment and taken out of the turnover. First of all it is not legal. You can but you have to distribute the cost over the number of years the equipment will last.

Bafidi bugger off back to your taxi driving. You know fuck all about how a business runs.

So can anybody explain how a company can declare losses for 10 years, then when questioned by MPs suddenly declare they will pay millions in tax. Where does this money come from?

They should be done for tax evasion. They are common criminals. And yet they use our hospitals, police, roads and schools no problem. They are nothing more than parasites or as the americans say ticks on a hound.

You are talking about depreciation, which is distributed over many years.

However, the full purchase is put through in year 1 because the company will claim VAT.

So let's say the boss purchases a $100,000 Mercedes AMG v8, he can claim VAT on that. He gets $10,000 back straight away. Then all the costs are claimed.

There are many advantages in owning a business.

[Lordo]

You stupid idiot. Of course a business can claimthe VAT there and then.
But Capital expenditure is another matter. There is also Capital Allowances invoved as well as depreciation.

Now bugger off and play with your joystick.

[miltiades]

Paphitis wrote:
"So the vehicle becomes a legitimate expense. Everything from fuel, to maintenance, insurance."
The vehicle cost is an expenditure and not a P&L entry but a Balance sheet entry. The vehicles are added on to the companies assets, the fire NOT an expense.
.

[Get Real!]

Paphitis wrote:
"So the vehicle becomes a legitimate expense. Everything from fuel, to maintenance, insurance."
The vehicle cost is an expenditure and not a P&L entry but a Balance sheet entry. The vehicles are added on to the companies assets, the fire NOT an expense.

That doesn’t sound right… assuming a DE system.

I thought the Balance Sheet was something you only did at the end of the financial year to see if the Debit vs Credit columns balanced!

And that when purchasing a company vehicle you credit the “delivery vans” or “vehicles” account and debit “cash”.

Ah well...

[repulsewarrior]

How may companies order millions for equipment and taken out of the turnover. First of all it is not legal. You can but you have to distribute the cost over the number of years the equipment will last.

Bafidi bugger off back to your taxi driving. You know fuck all about how a business runs.

So can anybody explain how a company can declare losses for 10 years, then when questioned by MPs suddenly declare they will pay millions in tax. Where does this money come from?

They should be done for tax evasion. They are common criminals. And yet they use our hospitals, police, roads and schools no problem. They are nothing more than parasites or as the americans say ticks on a hound.

You are talking about depreciation, which is distributed over many years.

However, the full purchase is put through in year 1 because the company will claim VAT.

So let's say the boss purchases a $100,000 Mercedes AMG v8, he can claim VAT on that. He gets $10,000 back straight away. Then all the costs are claimed.

There are many advantages in owning a business.

I would suggest Paphitis that such an expenditure could be justified as an expense only if such an asset represented a small amount compared to such capital the owner has. Particularly, it is an expense if it represents the business as an asset profitably. In demonstrating that the vehicle is used for business, it is also possible to compare that usage to other functions. Attention to such details, recognises the limits to such claims responsibly, in effect reducing the risk that these claims will face closer scrutiny/rejected outright.

...many advantages, many responsibilities (too), in owning a Business.

[miltiades]

GR, you are confusing a Balance Sheet with a Trial Balance which is the primary exercise before one proceeds with the Profit and Loss account. The Balance Sheet shows the company's state of finance such as Cash in the bank and all other asserts, company vehicles included, as well as creditors and Debtors.

[Paphitis]

You stupid idiot. Of course a business can claimthe VAT there and then.
But Capital expenditure is another matter. There is also Capital Allowances invoved as well as depreciation.

Now bugger off and play with your joystick.

Go back and read my earlier post idiot.

I told you before that capital expenditures are claimable thr4ough the P&L Addendums and more specifically the addendum known as Depreciation Schedule.

Stock lists however are different. These purchases are claimable as an expense entry. And if you end up worth more stock, than the previous year.

My point is that these items are in fact hidden profits even though the company can be showing a loss on the P&L. If the company made x in capital expenditures like buying cars, or machinery, then these items are assets and the company can depreciate the items yearly and eat away the profit.