can i buy art through my business?
Discussion
i'm looking at buying a limited edition art piece blatantly for myself and to have in my house. i have a ltd company that i run from home on the side from my main job doing some IT consultancy. question is can i buy the art via the company - i know it blatantly for myself but whats the diff between buying art like that and having a company that buys art and sells it as a business? if i say its an investment can i get it? have no idea of the tax etc law but know when i come to take cash out of the company i have to give gordon 1/2 of it so if i can cut down the profit by buying the art instead this is better than buying it myself?
thanks
thanks
On the face of it buying a piece f artwork through the company which is then displayed in your home is a 
.
However, what's the difference if the company bought it as an investment and stored it. Who's to say where it needs to be stored?
A questionable one which I'm sure EricMC will be along shortly to answer.
.However, what's the difference if the company bought it as an investment and stored it. Who's to say where it needs to be stored?
A questionable one which I'm sure EricMC will be along shortly to answer.
I suspect it will depend if it hangs in business premises?
As you state it, it is obviously not eligible to be a busiess asset or expense and in IT I don't think you could say it was a business asset unless it did really hang in the office (at least for the day HMRC came).
I had though the same about buying a wood near my house. My accountant tutted at me.
As you state it, it is obviously not eligible to be a busiess asset or expense and in IT I don't think you could say it was a business asset unless it did really hang in the office (at least for the day HMRC came).
I had though the same about buying a wood near my house. My accountant tutted at me.
Brown and Boris said:
I suspect it will depend if it hangs in business premises?
As you state it, it is obviously not eligible to be a busiess asset or expense and in IT I don't think you could say it was a business asset unless it did really hang in the office (at least for the day HMRC came).
I had though the same about buying a wood near my house. My accountant tutted at me.
well my business is IT but i dont have to stick to one business do I if i want to branch out into other areas thats up to me?As you state it, it is obviously not eligible to be a busiess asset or expense and in IT I don't think you could say it was a business asset unless it did really hang in the office (at least for the day HMRC came).
I had though the same about buying a wood near my house. My accountant tutted at me.
If you have a business office and decide to buy a piece of art for the office, then there would be no problem.
If you use your company to buy a piece of art for hanging in your home for your personal enjoyment, the Revenue will not have a problem with this PROVIDED you declare it as a Benefit in Kind and pay the necessary PAYE and Class 1A NI due.
There would be no tax advantage in the company buying this art anyway as it would not be eligible for write off against the company's business profit.
If you use your company to buy a piece of art for hanging in your home for your personal enjoyment, the Revenue will not have a problem with this PROVIDED you declare it as a Benefit in Kind and pay the necessary PAYE and Class 1A NI due.
There would be no tax advantage in the company buying this art anyway as it would not be eligible for write off against the company's business profit.
Eric Mc said:
If you have a business office and decide to buy a piece of art for the office, then there would be no problem.
If you use your company to buy a piece of art for hanging in your home for your personal enjoyment, the Revenue will not have a problem with this PROVIDED you declare it as a Benefit in Kind and pay the necessary PAYE and Class 1A NI due.
There would be no tax advantage in the company buying this art anyway as it would not be eligible for write off against the company's business profit.
ahh there you are Eric! Thanks If you use your company to buy a piece of art for hanging in your home for your personal enjoyment, the Revenue will not have a problem with this PROVIDED you declare it as a Benefit in Kind and pay the necessary PAYE and Class 1A NI due.
There would be no tax advantage in the company buying this art anyway as it would not be eligible for write off against the company's business profit.
why can you not write it off against profits - if my business was buying and selling art i presume i could?
Eric Mc said:
But it's not, is it?
The basic rule about allowability of expenses is that the expense has to have been incurred wholly and exclusively for the purpose of the trade.
If you are not trading as an art dealer, then how could buying a painting qulaify as an allowable trading expense?
can a company not invest its money then? ( not having a go at you just arguing the case + am naive! )The basic rule about allowability of expenses is that the expense has to have been incurred wholly and exclusively for the purpose of the trade.
If you are not trading as an art dealer, then how could buying a painting qulaify as an allowable trading expense?
I'm afraid you are all wrong - a business can buy artwork in the same way it can buy a sofa for a reception area, or a 52" HD LCD screen for client demos... It makes no difference how silly the purchase may seem or how much it may have cost in relation to the businesses turnover/profits - there is no law against being a bad businessman(person?). The purchase, like IT equipment or a pencil, is fully tax deductable, and if you work from home, can be used to 'stage' demos at client sites, along with your laptop, desktop PC, server and several flat screens, trailer, Cayenne and whatever else you may need to do the task (if you ever needed to). It's always best to be prepared for everything... You'll be amazed at the bad business purchases I have made in the past :-)
To put this into perspective, IBM UK have auditors that go around the major sites once a year to check on their various artworks hanging in boring offices. These have been bought over a long period, some are worth a few huundred pounds, some a few thousand, but they have tons of them and the majority have increased in value since purchase. I have been into empty offices which were used as storage for some of the works. Any which were hung in offices were just tacked up above filing cabinets - guess why a company like IBM had so many of these then...
To put this into perspective, IBM UK have auditors that go around the major sites once a year to check on their various artworks hanging in boring offices. These have been bought over a long period, some are worth a few huundred pounds, some a few thousand, but they have tons of them and the majority have increased in value since purchase. I have been into empty offices which were used as storage for some of the works. Any which were hung in offices were just tacked up above filing cabinets - guess why a company like IBM had so many of these then...
nav2100 said:
I'm afraid you are all wrong - a business can buy artwork in the same way it can buy a sofa for a reception area, or a 52" HD LCD screen for client demos... It makes no difference how silly the purchase may seem or how much it may have cost in relation to the businesses turnover/profits - there is no law against being a bad businessman(person?). The purchase, like IT equipment or a pencil, is fully tax deductable, and if you work from home, can be used to 'stage' demos at client sites, along with your laptop, desktop PC, server and several flat screens, trailer, Cayenne and whatever else you may need to do the task (if you ever needed to). It's always best to be prepared for everything... You'll be amazed at the bad business purchases I have made in the past :-)
To put this into perspective, IBM UK have auditors that go around the major sites once a year to check on their various artworks hanging in boring offices. These have been bought over a long period, some are worth a few huundred pounds, some a few thousand, but they have tons of them and the majority have increased in value since purchase. I have been into empty offices which were used as storage for some of the works. Any which were hung in offices were just tacked up above filing cabinets - guess why a company like IBM had so many of these then...
How do you come to the conclusion that I was wrong? I did actually mention that buying art for an "office" was not a problem. The costs of buying that art would, within reason, be counted as normal redecorating and repairs to the office - as would the buying of pot plants and other ornaments to make the office a pleasent place for employees and visitors.To put this into perspective, IBM UK have auditors that go around the major sites once a year to check on their various artworks hanging in boring offices. These have been bought over a long period, some are worth a few huundred pounds, some a few thousand, but they have tons of them and the majority have increased in value since purchase. I have been into empty offices which were used as storage for some of the works. Any which were hung in offices were just tacked up above filing cabinets - guess why a company like IBM had so many of these then...
Problems might arise if the art was very expensive as then, like any large costs incurred in improving an office, the expense might be construed as being of a Capital nature. In that case, it could not be merely written off against the company's/business' profits but capitalised in the balance sheet as a fixed asset. For tax purposes, only the relevant Capital Allowances could be claimed - which might not amnount to much (or anything at all) in the case of a work of art.
The OP specifically said he wanted to use company funds to buy art for his home. There was no business use involved at all. Therefore there was no tax relief avaiable to the company for purchasing that art. In fact, there was every chance he would be taxed personally under the Benefit in Kind system.
Of course, Corporation Tax and Income Tax are now Self Assesed taxes so the onus is on the director or the taxpayer to be honest and truthful when completing their company accounts and preparing their Self Assessment tax returns.
So here's a question: Over the last couple of years I've spent quite a bit on art for my offices (I'm guessing £30k+). I work from home a couple of days a week, sometimes I meet suppliers and emplyees in my home office. As such, If I were to buy art for my home office would it, or some of it, be Tax deductible?
If you have a dedicated work office, then any items bought for installation in that office should be allowable without too much bother - subject to their status as revenue or capital items.
I have to say £30,000 would look extremely high for merely putting some paintings in an office attached to a house - although it might depend on the size of the house. Also, such large scale expenditure, even if allowable, might be looked on as Capital Costs and would not be offsetable against business profits as mere "expenses". If they were deemed to be Capital in nature - there are no Capital Allowances that can be claimed on such expenditure.
I have to say £30,000 would look extremely high for merely putting some paintings in an office attached to a house - although it might depend on the size of the house
. Also, such large scale expenditure, even if allowable, might be looked on as Capital Costs and would not be offsetable against business profits as mere "expenses". If they were deemed to be Capital in nature - there are no Capital Allowances that can be claimed on such expenditure.Edited by Eric Mc on Tuesday 10th June 18:36
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