Shooting as a 'business'

[apache]

Following on from the 'Income Tax' thread I have wondered if any of you run your shooting as a business.

 

Not sure how hard it would be and how much paperwork would be involved. Certainly it would be nice to claim the VAT back on guns and ammo. You could write them off against tax too - if you shooting business made a loss you may be able to claim tax back from your main job! Tax back on memberships and insurance too.

 

If I get to shooting as much as I intend to I might look down this avenue.

 

Obviously there would have to be some 'product' sold from the business, but a regular trip to the game dealer with a couple of hundred rabbits should count as a business 'output'.

 

Anyone got any thoughts?

[beretta]

i would think again.

[Lez325]

yes - good luck with that

 

Les

[artschool]

I thought this was an interesting question, so i asked my accountant.

 

he says this is completely feasible, but will depend on the projected turnover as obviously you cant register a hobby as a business.

 

you would also only be able to claim the vat back on the shooting you do which relates to the business.

 

so lets say you were shooting 1000 rabbits a year you could only claim for say 1500 rounds of ammo and whatever rifles you bought for the job. although i suppose you could argue that any range time is to do with keeping your eye in and is part of the training for the job.

 

go and fill out the VAT1 from from the hmrc website send it off and let us know

Edited August 25, 2010 by artschool

[MC]

I thought this was an interesting question, so i asked my accountant.

 

he says this is completely feasible, but will depend on the projected turnover as obviously you cant register a hobby as a business.

 

you would also only be able to claim the vat back on the shooting you do which relates to the business.

 

so lets say you were shooting 1000 rabbits a year you could only claim for say 1500 rounds of ammo and whatever rifles you bought for the job. although i suppose you could argue that any range time is to do with keeping your eye in and is part of the training for the job.

 

go and fill out the VAT1 from from the hmrc website send it off and let us know

 

 

I am sure you could do that but remember you would also have to register as self employed and pay tax on whatever you earnt from shooting, whether that was from selling your rabbits and pigeons etc or your prize money from clay shooting.

[artschool]

I am sure you could do that but remember you would also have to register as self employed and pay tax on whatever you earnt from shooting, whether that was from selling your rabbits and pigeons etc or your prize money from clay shooting.

 

yes but you wouldnt actually earn anything because you outgoings will most likely exceed your income so any tax would be miniscule.

 

but you would be able to remove the vat from your purchases.

 

registering as self employed is a fairly simple process.

[Highlander]

I believe the current maximum you can turn over before having to register for VAT is £70k. Whilst I'm not sure that there's a minimum I'm willing to bet that HMRC wouldn't allow small turnovers to register as it simply isn't financially feasible. Simply registering so you can claim back the VAT you spend on what would essentially be a hobby won't cut it.

[MC]

yes but you wouldnt actually earn anything because you outgoings will most likely exceed your income so any tax would be miniscule.

 

but you would be able to remove the vat from your purchases.

 

registering as self employed is a fairly simple process.

 

 

True enough but from the moment you register as self employed you have to start paying NI stamp contributions, also as HL has said there is a turnover threshold for VAT registrations and I am sure you cannot register just to take money out. You will still have to pay the VAT on all your purchases and then claim it back when you do your VAT returns each quarter.

 

You would also have to charge VAT on all your game as you sell it, so instead of making a pound for a rabbit you will only get about 85 pence as you will have to give the VAT to HMRC.

 

If you really think it is worth it then try it, personally I cannot see the point. If you already have a business which is VAT registered then just get your RFD to make the invoice out for safety clothing or some such like and claim the whole lot back.

 

Not that I would advise trying to defraud the Government in anyway shape or form.

[natcot]

Hmmmm, what you're basically saying is that on every VAT return you'll be stating minimum income but high expenditure, therefore a nice reclaim!! Not sure that VAT man is going to like that one, you'll be hard pressed to convince anyone that it is a bona fide business.

 

Very much doubt you would be able to offset the losses in the 'shooting business' against your regular job. To recover tax you have to have paid it in the first instance.

 

Annual returns, VAT returns, company / sole trader accounts etc etc. A fair bit of hassle to recover VAT, are you really spending that much on shooting that it would be worth the hassle?

[IKNIGHT167]

"Sponsorship" might be the best course. Using the company to buy shells etc would mean that they were bought without the deuction of P.A.Y.E.

[webber]

If shot game is food?

 

VAT is not chatged on food!

 

I think that the idea is neat, but seriously flawed.

I do however have a friend who runs a small pest control business, need I say more.

 

webber

[artschool]

he asked was it possible and it apparently is.

 

do i think its a good idea. no.

 

i am a sole trader and am also the director of a ltd company. administering it all is a pain in the ***.

 

as for claiming loads of vat back, well carousel fraud went on long enough so it can be done.

 

there is also a NI holiday coming up for new business.

 

and i dont think that vat applies to livestock sales?? (webber confimed that whilst i was typing)

 

anyhow i still dont think its a good idea. and yes whoever tried it would need to convince the taxman.

Edited August 25, 2010 by artschool

[rimfire4969]

As stated before everthing you sell will have to have the VAT added to it, this would include any guns you want to sell. To much of a pain to do in my mind.

[artschool]

As stated before everthing you sell will have to have the VAT added to it, this would include any guns you want to sell. To much of a pain to do in my mind.

 

not everything attracts VAT.

 

the guns would also be counted as an asset and be subject to depreciation.

Edited August 25, 2010 by artschool

[covlocks]

VAT registration - you can register for VAT whenever you like, even if only to reclaim the VAT on your purchases. A number of business types do that - some types of food shops come immediately to mind, where they claim back VAT on services supplied to them but all their sales are zero rated.

 

Registering a hobby a a business - if you are selling some of your hobby output - its a business, so can be registered. What you claim Tax relief or VAT refunds for must be directly proportional to your sales, so you cant go out and buy £5000 worth of guns and cartridges, and claim tax relief and the vat back if you only sold 100 bunnies last year.

[HDAV]

Interesting if you are already Self employed and VAT registered there are limits on what you can do that aren't Vat rated. Some things like prize money isnt income IIRC nor is gambling (there is case law about it) but HMRC wont let you register a pro gambler and claim the Vat back (you can as an after dinner speaker i think) I am starting to wonder if anything i sell is subject (even if its not strictly business related) If you claim vat when you buy you add vat when you sell. I am sure the Pro pest controllers are VAT reg and claim and charge VAT on Services. They wont let you run at a loss for long though......but factor in mileage/van everything else and you could be "loosing" a lot of money quickly. I suppose the same goes for small shoots and syndicates being VAT reg is basically being an unpaid tax collector but if you get into zero rated stuff it's a lot trickier to administer...

[Dekers]

You can register for VAT whatever your turnover, and you can claim business costs whatever your turnover!

 

If you are simply looking to save money on purchases register as a RFD and hope you can get some distributor deals.

 

Making a living as a small firm in Game & Vermin control or Shooting is not easy....not impossible, but not easy!

 

[apache]

This is not something I was particularly thinking of doing, more a hypothetical question.

 

You can register any sized business for VAT even if your turnover is only a few hundred pounds a year.

 

There are plenty of large companies registered for VAT and making a loss so they claim the VAT back and end up in net profit from HMRC. There would be no food on rabbits sold as they are food.

 

On the whole farmers claim back VAT as their produce doesn't attract VAT.

[njc110381]

I'm a self employed gardener and I put about 25% of my shooting expenses through my business. Obviously I can't run it all through as that would be a bit dodgy, but I do occasionally get paid to shoot Deer/Foxes/Rabbits for customers with large gardens.

 

I've just recently been offered £50 per head for the Munties and Roe that are demolishing one of the places I work at. Not a fortune I know but it makes something I'd happily do for free even more worthwhile!

 

I doubt running a business at a loss over a long period would cut it with the revenue especially if you're just trying to save money on your hobby. I think they call that kind of thing fraud!

[covlocks]

I am sure the Pro pest controllers are VAT reg and claim and charge VAT on Services.

 

If the are vat registered they will charge VAT because labour is not zero rated but in some cases the products they use may be. It may be to their advantage to be VAT registered if they need to claim a lot of travelling/vehicle expenses.

 

There is a big downside to being VAT registered, it means to retain the same income you have to hike your prices up 17.5%, and as labour is mainly where you mainly make you money, unless you are a pure retailer, you can not escape charging it.

 

By hiking your prices up, you have now become more expensive than your competitor who isn't VAT registered, your accountancy bills will be higher, and you will suffer greater scrutiny of your actions by the VAT man.

 

To gain a few pounds is it worth loosing custom to the cheaper person, and causing yourself a lot of admin hassle??

[Canis]

I work as a consultant in the construction industry and provide my services from a limited company. I am registered for VAT despite being under the threshold as it is beneficial to me financially. i would strongly advise anyone who works on short term contracts to consider working this way as it can be incredibly tax efficient. ( you need to ensure that you avoid ending up a disguised employee of the people you work for but thats another matter).

 

If you are shooting and making "real" income from it then a lot of your costs could be offset against not just VAT but Corporation Tax as well- even if its not your main job !(like NJC 110381 evidently does). If however you put hundreds of pounds in expenses against a modest income you would likely to need to be able to prove that is a business eg a contract with the people whose land you pest control and the same for the game dealer you supply.

 

Essentially if its your real intention to earn money from shooting as a pest controller its possible but imho you need to be serious about it making money shooting to be worth the hastle.

 

That said, with mandatory eye protection being a requirement on a lot of building sites I enjoyed putting the receipt in to my accountant last week for a pair of Oakley shooting glasses (which I am supplying myself with as my choice of Safety Specs for site use only you understand not for shooting with - honest )

[Nicky T]

What about declaring certain shooting related costs (carridges and clays for example) as "corporate entertainment"?

[artschool]

What about declaring certain shooting related costs (carridges and clays for example) as "corporate entertainment"?

the inland rev are very strict on that type of stuff these days. so no chance.