paying yourself?

bigdave

bigdave

Well-Known Member
My other half is now officially running Bleed Ink as well as her new business Gl'mour as a sole trader. We're starting to go through the ball ache of tax etc but are wondering if there's any tax benefit to Gl'mour paying Bleed Ink for print services? For example.. she prints 100 sheets at a cost of £20, invoices that from Bleed Ink to Gl'mour at cost price. It goes down as a Gl'mour business expense so is offset against tax but the original invoice from the printer is also a business expense for Bleed Ink so could in theory be off set again? Is that allowed as a sole trader or would she need to be keeping two sets of books for the two companies?
 
I think I understand the question; I'm not sure how sending an invoice is a "business expense" for BI so I assume you mean the cost of the actual printing is an expense (inks, paper, electricity)?

Either way, you definitely need two separate books for the two companies, it's largely irrelevant who owns/runs the companies, think of them both individually, if G was a third party client then BI would factor in those costs wouldn't it? So do the same here. I'm not sure whether there is any real benefit to this for you though, my mind is foggy today, it feels like you're just shuffling money around, you could certainly use losses on one company to offset profits on another by shuffling money around before year end but day to day I'm not sure you're saving anything.
 
As a sole trader you dont really get the offestting costs benefits the same as you would do as a limited company, you may want to consider mergin the businesses into one ltd company and then pay your self a wage form that company, it will invilve a large return at the end of the year but you could save yourself alot in tax in the long run
 
Talk to an accountant. A good one will not charge you for a first meeting - a bit like getting a quote! Get some advice.
 
Emma's uncle is an accountant so we're hoping he can help advise us but its difficult to pin him down as he works incredibly long hours.
 
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