lottery tickets a business expense?
Discussion
I'm not saying the company CAN'T buy these products. It;s just that the cost of purchasing them will NEVER be claimed as a business expense.
When a business INVESTS money in a type of financial account - whether it is purchasing shares in another business, putting money into a deposit or savings account or buying lottery tickets or premium bonds, these costs would be posted DITRECTLY to the company's Balance Sheet as the acquistion of an asset - not to the Profit and Loss account as a business expense.
So, legally, the company can put its money into these products. If and when that product generates any sort of return, the return will be taxed - whether it is interest or a cpaital gain - unless the "gain" is exempted from tax.
When a business INVESTS money in a type of financial account - whether it is purchasing shares in another business, putting money into a deposit or savings account or buying lottery tickets or premium bonds, these costs would be posted DITRECTLY to the company's Balance Sheet as the acquistion of an asset - not to the Profit and Loss account as a business expense.
So, legally, the company can put its money into these products. If and when that product generates any sort of return, the return will be taxed - whether it is interest or a cpaital gain - unless the "gain" is exempted from tax.
Edited by Eric Mc on Friday 22 February 16:56
Eric - as an example could you use a bet as a business expense if you had say bought £5,000 worth of england football shirts and those crappy flag things that go on cars - so you'd hedge your risk by betting on england not qualifying for example.
I've heard it mentioned before that some companies do hedge their liabilities in cirmunstances such as the above through the bookmakers - is this true and is it counted as an investment on the balance sheet?
I've heard it mentioned before that some companies do hedge their liabilities in cirmunstances such as the above through the bookmakers - is this true and is it counted as an investment on the balance sheet?
dcw@pr" Target="_blank">class="forumQuoter">dcw@pr said:
gotcha
Thats what the taxman will say!!!Seriously though, there is a bit of an issue that perhaps you could be some tickets from your own money, and some for the company...
Lets say by co-incidence the company bought all the losing ones and you bought the biggie yourself...
I don't know how such a case might do, or even if it is traceable but I think accounting for Lottery tickets in the accounts wont look good should someone go over the account for some reason to inspect them.
jamesw2000 said:
Eric - as an example could you use a bet as a business expense if you had say bought £5,000 worth of england football shirts and those crappy flag things that go on cars - so you'd hedge your risk by betting on england not qualifying for example.
I've heard it mentioned before that some companies do hedge their liabilities in cirmunstances such as the above through the bookmakers - is this true and is it counted as an investment on the balance sheet?
There is a difference between buying stock for resale on a speculative business "hunch" and buying tickets for a legalised lottery. The first is a bona fide business "gamble" whilst the latter is a straightforward investment of business funds.I've heard it mentioned before that some companies do hedge their liabilities in cirmunstances such as the above through the bookmakers - is this true and is it counted as an investment on the balance sheet?
When buying business stock, the implied accounting treatment is that the stock IS a balance sheet investment (Stock in Hand) until it is sold. At the point of sale, the cost of the actual sold stock is offset against the proceeds of the stock sold - generating a profit (if the gamble has paid off) or a loss (if it hasn't). Tax will be paid on any profits generated, of course.
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