Sponsorship Money
Discussion
Folks, a little advice and/or personal insight if you please.
Granted budgets and the like vary immensely across the series so the figures I mention may be loose change to some, however...
Say I landed a sponsorship deal worth £5k, £10k, whatever, a substantial sum of money, whats the best way to look after said sponsorship? Talking form a legal and especially tax point of view? I'm "self assesed" for all thats worth so if it went into a personal account I assume I'd be taxed accordingly, what if I set up a company, ACME Racing Inc or whatever? Would that be a better way to go?
Thoughts and advice welcome before I visit the accountant and lose the will to live
Regards
Iain
Granted budgets and the like vary immensely across the series so the figures I mention may be loose change to some, however...
Say I landed a sponsorship deal worth £5k, £10k, whatever, a substantial sum of money, whats the best way to look after said sponsorship? Talking form a legal and especially tax point of view? I'm "self assesed" for all thats worth so if it went into a personal account I assume I'd be taxed accordingly, what if I set up a company, ACME Racing Inc or whatever? Would that be a better way to go?
Thoughts and advice welcome before I visit the accountant and lose the will to live
Regards
Iain
Yes I beleive that is the case as a self employed person. You'd need to check with your accountant which "case" under Schedule D it comes within, which can make a difference depending on how you currently derive your earnings. The same goes if you're employed and currently taxed under schedule E too.
one of the alternatives, which you need to look at carefully is to set up your racing business as a limited company in its own right, thus separating it from a hobby. Then you can off set all racing costs against the income it brings in (ie, sponsorship). Also, if you register for VAT you can claim back the VAT paid on all items purchased for racing - you would of course have to remit VAT on certain activities too, namely the sponsorship in your example. The downsides of this is that you have to submit yearly accounts and prepare quarterly VAT returns, which can be a little cumbersome and cost you money if you need an accountant to do it for you.
I'm no expert at all but your accountant will be able to work out what would be best for your circumstances. Remember though, if you set it up as a limited company, you have to be able to demonstrate that it is a genuine business and take on the responsibilities of being a Director.
one of the alternatives, which you need to look at carefully is to set up your racing business as a limited company in its own right, thus separating it from a hobby. Then you can off set all racing costs against the income it brings in (ie, sponsorship). Also, if you register for VAT you can claim back the VAT paid on all items purchased for racing - you would of course have to remit VAT on certain activities too, namely the sponsorship in your example. The downsides of this is that you have to submit yearly accounts and prepare quarterly VAT returns, which can be a little cumbersome and cost you money if you need an accountant to do it for you.
I'm no expert at all but your accountant will be able to work out what would be best for your circumstances. Remember though, if you set it up as a limited company, you have to be able to demonstrate that it is a genuine business and take on the responsibilities of being a Director.
Lots of problems creating a company to go racing, which can land you with a massive personal tax bill, and being barred from being a company director, so I'd speak to you accountant!!!
If the nice tax man thinks your taking the piss and funding your racing he will simply tax the value of your racing as benifit in kind....
If however you can prove your racing is a company making money, say marketing in motorsport then you can probably get a way with it, but to do that your going to have to get enough sponsorship to turn a profit...
If the nice tax man thinks your taking the piss and funding your racing he will simply tax the value of your racing as benifit in kind....
If however you can prove your racing is a company making money, say marketing in motorsport then you can probably get a way with it, but to do that your going to have to get enough sponsorship to turn a profit...
TVRleigh_BBWR said:
The other way is to get your sponsor to just pay for stuff, then you never touch the money.
Tires and entry fee's are going to be close to 5k.
Tires and entry fee's are going to be close to 5k.
usually a lot simpler on everyones books, if you can get people to supply goods/services. often the best way to maximise the sponsorship as well. much better to get 100 quid of something at cost to them than you having to spend that 100 quid retail and pay vatG
Edited by Graham on Monday 26th November 11:14
we're a little bit stuck until the BRSCC annouce everything at the AUtosport show in january, as they want to keep the details for a big splash then. a real pita as we need the info now...
But provisionally
1) Full Msa Championship
2) High Horse Power RWD
3) 6 * 2 day meetings at top circuits including ( donnington, Silverstone, Brands Hatch, Snetterton )
4)TV coverage ( probably sky and maybe channel 4 or 5)
5)one of the 6 permanent championships on BRSCC promoted Tour
although that is still all provisional other than the championship status...
But provisionally
1) Full Msa Championship
2) High Horse Power RWD
3) 6 * 2 day meetings at top circuits including ( donnington, Silverstone, Brands Hatch, Snetterton )
4)TV coverage ( probably sky and maybe channel 4 or 5)
5)one of the 6 permanent championships on BRSCC promoted Tour
although that is still all provisional other than the championship status...
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