Why would you buy a lower league club

[drgm]

http://www.bbc.co.uk/sport/football/36266364" onclick="window.open(this.href);return false;

I would be very worried if I was a Forest Green Fan. Read the very last paragraph

Now I'm not an economist but it seems a very expensive way of avoiding paying a million pounds tax.
They seem to saying that if your company makes 5mil. The football club loses 5 mil. The profit and loss cancels out and you avoid tax.
Am I missing something here? If your company makes 5mil profit, doesn't it make more sense to pay the 1 mil tax and pocket the remaining 4mil profit? If you cover the football clubs' losses with the profit from your company, then you've made no money at all!

Unless of course your little wheeze is to allow the football club to pile up debt season upon season while paying no tax on your companies' profits. At some point in the future you walk away from the football club without ever having actually paid any of their losses at any time.

[RegencyCheltenhamSpa]

http://www.bbc.co.uk/sport/football/36266364

I would be very worried if I was a Forest Green Fan. Read the very last paragraph

Now I'm not an economist but it seems a very expensive way of avoiding paying a million pounds tax.
They seem to saying that if your company makes 5mil. The football club loses 5 mil. The profit and loss cancels out and you avoid tax.
Am I missing something here? If your company makes 5mil profit, doesn't it make more sense to pay the 1 mil tax and pocket the remaining 4mil profit? If you cover the football clubs' losses with the profit from your company, then you've made no money at all!

Unless of course your little wheeze is to allow the football club to pile up debt season upon season while paying no tax on your companies' profits. At some point in the future you walk away from the football club without ever having actually paid any of their losses at any time.

If that was what happened in reality, then yes. But that is not how tax accounting works.

It's just a paper based accounting practice - the £5m doesn't actually move from one to the other as they are owned by the same owner.

For example, I could set up a company and say in year one it operated £400,000 profit. That company could then 'invest' in a house and a car and record zero profit and pay no tax. However, I as an individual personally still benefit from having spent £400,000 spent on a house and car.

[confused.com]

http://www.bbc.co.uk/sport/football/36266364

I would be very worried if I was a Forest Green Fan. Read the very last paragraph

Now I'm not an economist but it seems a very expensive way of avoiding paying a million pounds tax.
They seem to saying that if your company makes 5mil. The football club loses 5 mil. The profit and loss cancels out and you avoid tax.
Am I missing something here? If your company makes 5mil profit, doesn't it make more sense to pay the 1 mil tax and pocket the remaining 4mil profit? If you cover the football clubs' losses with the profit from your company, then you've made no money at all!

Unless of course your little wheeze is to allow the football club to pile up debt season upon season while paying no tax on your companies' profits. At some point in the future you walk away from the football club without ever having actually paid any of their losses at any time.

If that was what happened in reality, then yes. But that is not how tax accounting works.

It's just a paper based accounting practice - the £5m doesn't actually move from one to the other as they are owned by the same owner.

For example, I could set up a company and say in year one it operated £400,000 profit. That company could then 'invest' in a house and a car and record zero profit and pay no tax. However, I as an individual personally still benefit from having spent £400,000 spent on a house and car.

However, if the company owns the said house and car and goes bankrupt. You no longer benefit from the house or car. Presuming they will be used to cover debts.
Of course HMRC will then no doubt bring in some retrospective legislation to say that while it was legal for the company to purchase the items when they did. They have now decided that it wasn't legal and back date all taxes owed.

[drgm]

If you bought a house and a car then these are both assets that can be sold. Paying off a debt
is just lost money. I can't see the logic

[leohoenig]

The logic is this
If I want to spend £5 million on running a football club, then I first have to earn £5 million, which with the way the tax man takes money from me, actually means earning more than £6 million
If however, the company that I own, also owns the football club, and pays the £5 million direct to the club, then the tax man has no involvement in the transaction at all
Hence you have saved at least a £1 million that would have otherwise gone to the taxman.
Not spending £5 million on the football club is, of course, another option, leaving you better off by £5 million - (the taxman's share)

[Malabus]

It's all about the tax man.

[confused.com]

It's all about the tax man.

Government backed robbers

[RegencyCheltenhamSpa]

It's all about the tax man.

Government backed robbers

Really? I for one am proud to pay taxes to support our nation.

I never understand people who complain about taxes.

In the free market there are always market failures of negative externalities which impact society or public goods which are underprovided. Taxes are essential to addressing these failures.

[Malabus]

Really? I for one am proud to pay taxes to support our nation..

In that case pay the 45% tax rate and you will be even more prouder.

Nobody likes paying tax for migrants houses and their extortionate benefits so please don't make us fools on this public forum.

[confused.com]

It's all about the tax man.

Government backed robbers

Really? I for one am proud to pay taxes to support our nation.

I never understand people who complain about taxes.

In the free market there are always market failures of negative externalities which impact society or public goods which are underprovided. Taxes are essential to addressing these failures.

I complain and will continue to complain about the ever shifting goal posts that the HMRC / Government put in the way of people.
Since when was there ever a legal term of 'aggressive avoidance' ? Whatever happened to the well sought out path of an accountant advising you on the legal way to minimise your tax impact ? seems now that all these accountants were advising on illegal strategies, as evasion and aggressive avoidance (formerly known as perfectly legal tax planning), have become the same thing.
In what other area of law, have laws been changed and applied retrospectively ? None, apart from HMRC. What moral principle can be found to support the stance of ..... remember what we told you was legal 20 years ago, well we have passed a new law and it is now deemed we were wrong back then and you were in fact breaking the law. Absolute travesty of democracy in action.
What other body is allowed to say, "we believe you owe us money, OK so we can't prove it right now and you dispute it. So tell you what, pay us what we have worked out you owe (due to us applying a law retrospectively), we can all go to court and if you win, we will give you your money back. But don't be expecting any interest applied"

level playing field = fair taxation

[RegencyCheltenhamSpa]

Really? I for one am proud to pay taxes to support our nation..

In that case pay the 45% tax rate and you will be even more prouder.

Nobody likes paying tax for migrants houses and their extortionate benefits so please don't make us fools on this public forum.

Happily. Would be equally happy to live in Denmark and Sweden and pay taxes there. You get what you pay for, and I personally want clean air and streets, good transport, and good libraries, swimming pools and public parks.

Malabus, where do you think the money for your beloved public bike lanes and bike racks comes from?

[Artemis]

Really? I for one am proud to pay taxes to support our nation..

In that case pay the 45% tax rate and you will be even more prouder.

Nobody likes paying tax for migrants houses and their extortionate benefits so please don't make us fools on this public forum.

Do you like migrants who pay taxes to contribute to public services, pensions, bike lanes, cycle racks, local government grants / loans to help football clubs, etc.

[Malabus]

Malabus, where do you think the money for your beloved public bike lanes and bike racks comes from?

A bike rack and a immigrant house. Bit of a difference.

[Malabus]

Really? I for one am proud to pay taxes to support our nation..

In that case pay the 45% tax rate and you will be even more prouder.

Nobody likes paying tax for migrants houses and their extortionate benefits so please don't make us fools on this public forum.

Do you like migrants who pay taxes to contribute to public services, pensions, bike lanes, cycle racks, local governmentioned grants / loans to help football clubs, etc.

If you can find one.

[RegencyCheltenhamSpa]

I complain and will continue to complain about the ever shifting goal posts that the HMRC / Government put in the way of people.
Since when was there ever a legal term of 'aggressive avoidance' ? Whatever happened to the well sought out path of an accountant advising you on the legal way to minimise your tax impact ? seems now that all these accountants were advising on illegal strategies, as evasion and aggressive avoidance (formerly known as perfectly legal tax planning), have become the same thing.
In what other area of law, have laws been changed and applied retrospectively ? None, apart from HMRC. What moral principle can be found to support the stance of ..... remember what we told you was legal 20 years ago, well we have passed a new law and it is now deemed we were wrong back then and you were in fact breaking the law. Absolute travesty of democracy in action.
What other body is allowed to say, "we believe you owe us money, OK so we can't prove it right now and you dispute it. So tell you what, pay us what we have worked out you owe (due to us applying a law retrospectively), we can all go to court and if you win, we will give you your money back. But don't be expecting any interest applied"

level playing field = fair taxation

Yes, the law was an ass. I support tightening of the loop holes to make a level playing field for all, rather than the perverse situation where the richer you are the more you can access loopholes.

I do empathise with your gripe, however you could argue that had these people not sought out avoidance schemes and legal loopholes and just paid the full taxes they owe like most people do then they wouldn't face this issue now. May have been technically legal at the time as lawyers found a new loophole as soon as one was closed, but certainly not fair or in decent spirit: they made their bed, now lie in it. I have no sympathy for people who tried to find holes in the law - i.e. not to find legal laws to abide by, but to find things which weren't yet illegal (like synthetic legal highs) - for their own gain to the cost of the British people.

As for other area of law where this happens and is retrospectively applied, there is the topical one of migration and the high-profile story in the news: http://www.theguardian.com/uk-news/2016 ... eportation" onclick="window.open(this.href);return false;

(Plus also sports doping; a performance enhancing substance could be unknown to and/or non-testable by the authorities so cheats can do it without breaking rules, then when the authorities and their methods catch-up and re-test old blood/urine samples they can strip past medals and trophies from the newly discovered cheats. In fact, the ongoing battle between society and tax avoidance schemes and drug-testers and drug-cheats is similar, with the cheats generally staying one step in front and moving on to the next scheme just as the authorities start closing down the current one.)

[RegencyCheltenhamSpa]

Do you like migrants who pay taxes to contribute to public services, pensions, bike lanes, cycle racks, local governmentioned grants / loans to help football clubs, etc.

If you can find one.

You yourself commented on the link I shared in non-footy saying how immigration are net contributors to the treasury in terms of tax/benefits; so yes, the vast majority pay taxers towards those things.