BNC Text G4J

Pre-retirement course: presentation. Sample containing about 2461 words speech recorded in public context

4 speakers recorded by respondent number C191

PS1WR Ag3 m (John, age 40, financial advisor) unspecified
G4JPS000 X u (No name, age unknown) unspecified
G4JPSUNK (respondent W0000) X u (Unknown speaker, age unknown) other
G4JPSUGP (respondent W000M) X u (Group of unknown speakers, age unknown) other

1 recordings

  1. Tape 089901 recorded on 1993-04-28. LocationNottinghamshire: Nottingham ( conference centre ) Activity: presentation

Undivided text

John (PS1WR) [1] first year of business or your first year of assessment, you made five hundred pounds profit from your ... business, is that what you've got in mind?
Unknown speaker (G4JPSUNK) [2] Yeah.
John (PS1WR) [3] You might have bought capital ... things, a van, tools etcetera, which might, just for example, cost you five thousand pounds.
[4] ... Now in the in the first year of business, you'd be allowed capital allowances on that ... which is m may well er varies i in the proportion, but just say ... just say it's er ten percent, five hundred pounds, actually will you make that four hundred.
[5] And you get a ten percent capital allowance.
[6] For cars it's actually ... quarter, twenty five percent on the reducing balance.
[7] So in that first year, at ten percent, you'd be given a capital allowance of five hundred pounds, to be set against a profit of four hundred pounds.
[8] So therefore you'd have no liability ... but you'd have unused capital allowances to be carried forward to the next year.
[9] Now that wouldn't affect your pension at all.
[10] ... No.
[11] At that stage.
[12] And, because you'd made a loss, you could, out of your taxed pension, introduce a couple of hundred pounds into the business as a capital in introduction, to keep the business running, and it wouldn't affect the profit figures at all.
[13] Is that right?
Unknown speaker (G4JPSUNK) [14] Yes [...] .
[15] Well thank you [...] .
Unknown speaker (G4JPSUNK) [...]
Unknown speaker (G4JPSUNK) [16] Would I actually get a tax refund [...]
John (PS1WR) [17] You could [...] .
Unknown speaker (G4JPSUNK) [18] on your loss, if you make a loss [...] .
John (PS1WR) [19] Or if, if that had been ... yes,i if you'd actually
Unknown speaker (G4JPSUNK) [...]
John (PS1WR) [20] if you'd actually made a minus ... there, ignoring capital allowances, you'd just made a loss of four hundred pounds, then that loss would be for a year of assessment, and in that year of assessment, it could be set against your salary or pensions for that year ... a as if it was a personal allowance.
Unknown speaker (G4JPSUNK) [21] So it would be worth running a small ... slightly unprofitable or non profit making business, to keep your tax bill down [...] .
John (PS1WR) [22] Well, well yes, because
Unknown speaker (G4JPSUNK) [23] People do.
[24] People do
Unknown speaker (G4JPSUNK) [...]
Unknown speaker (G4JPSUNK) [25] For a year or so.
John (PS1WR) [26] Oh yes, this is what the big business people, why they run far why one of the big business people used to buy farms.
[27] He got the pleasure of farming, and the losses were merely set off against er
Unknown speaker (G4JPSUNK) [...]
Unknown speaker (G4JPSUNK) [28] This is what used to upset the farmer down the road
Unknown speaker (G4JPSUNK) [...] [laugh]
John (PS1WR) [29] who, who was a genuine farmer.
[30] [...] a genuine farmer.
[31] Now then, I've made, oh er ... before I go into the capital gains [...] , er capital allowances you can claim a proportion of the capital allowances on a reducing balance, so er if a car for example costs you five thousand pounds, you'd actually be allowed twenty five percent in the first year, the twenty five percent would be reduced from five thousand, and in the next year you'd get twenty five percent off your balance until the five thousand pounds had been allowed against your profits.
[32] ... So it er could pay you in the first year of business to incur any capital that you could afford, because you can either get it against your first year's profits, or by not using the capital allowances, it's available for subsequent years' profit.
[33] ... Now then onto the capital, capital gains [...] . ...
Unknown speaker (G4JPSUNK) [34] Could I just say [...] , if you're thinking about going into small business, for heaven's sake use the small business advice bureau.
John (PS1WR) [35] Oh yes, every time.
[36] Yes.
Unknown speaker (G4JPSUNK) [37] They are wonderful.
[38] [...] . I mean you're entitle [...] you've got three interviews free.
John (PS1WR) [39] Yeah.
Unknown speaker (G4JPSUNK) [40] And you only start paying after you, after the third one.
John (PS1WR) [41] Right.
Unknown speaker (G4JPSUNK) [42] And erm a lot of them are retired business men, or, or people still, people in business who give their time freely to it.
John (PS1WR) [43] Very good.
[44] Yeah.
Unknown speaker (G4JPSUNK) [45] And they are, they really work [...] .
John (PS1WR) [46] Yeah.
[47] ... One of the other items of expenditure that could be in this er ... what did I say, five thousand pounds could be the ... your outgoings of your home, because you've used the spare room as an office.
[48] Or a garage as a workshop or a, a workshop as a workshop.
[49] And you can claim that proportion of your total outgoing.
Unknown speaker (G4JPSUNK) [...] ...
John (PS1WR) [50] But if you've used a, a room at home, then you have to watch the capital gains situation, because if it's your residence, then for capital gains purposes when you sell it, it's exempt from income tax.
[51] But if you've used er part of it as a business, then that part isn't your residence.
[52] ... So when, if, if you were to come to sell your residence, they would knock off that proportion of the total er er which could in fact give rise to a small capital gain ... depending on how the er how you sold, because you might sell it at a loss.
[53] But if you've made up the gain at all, then since it's residential property, it's exempt.
[54] But that part of it which is used in your business ... wouldn't be exempt, and could give rise to a gain.
[55] It's bound to be small, if it's a small part of your house.
[56] And in all, in most of those cases it will be covered by the individual exemption of five thousand eight hundred per annum anyway.
[57] ... There's no real ... I mean you'd have to be in a real big way of a business and use a large proportion of your house for the gain on that proportion to exceed five thousand eight hundred.
[58] So in most cases, you can ignore it.
[59] But nevertheless, we have to say that it's so.
[60] And furthermore, with the council tax, you could come up against the question of business rating for that ... [...] .
Unknown speaker (G4JPSUNK) [61] The other thing is you can claim an allowance for using your room against your tax, that's one
John (PS1WR) [...]
Unknown speaker (G4JPSUNK) [62] of the things you can do of course.
John (PS1WR) [63] As I say, a proportion of the, of your total outgoings which ... er related to that room, can be claimed as a business expense.
[64] Erm, wife's wages for answering the telephone.
[65] The phone of course is, is an allowed expense.
Unknown speaker (G4JPSUNK) [66] What if you don't use it full time?
[67] I mean are you allowed to claim for
John (PS1WR) [68] Well it, it's that proportion of business use.
Unknown speaker (G4JPSUNK) [69] I mean, you're only using it one day a week.
John (PS1WR) [70] Yes, yes.
[71] If, if you've got er a room, the re the tax inspector will say well, what proportion of the total would you say that room is?
[72] And if it's a quarter,
Unknown speaker (G4JPSUNK) [73] And you [...]
John (PS1WR) [74] What?
Unknown speaker (G4JPSUNK) [75] and if you used it one day a week.
John (PS1WR) [76] Well, it's a er seventh of a quarter, if you [...] .
Unknown speaker (G4JPSUNK) [...]
John (PS1WR) [77] And that proportion is then allowed as a business expense.
Unknown speaker (G4JPSUNK) [78] These people, young people often, who do some childminding, if they take in [...] children,
John (PS1WR) [79] Right.
Unknown speaker (G4JPSUNK) [80] is their house being used as a sort of business [...] ?
John (PS1WR) [81] It could be.
[82] It could be yes.
Unknown speaker (G4JPSUNK) [83] They could alter their tax status.
John (PS1WR) [84] Oh yeah, yes.
[85] If, if you're s setting up in business as a childminder, not doing it as a, for a friend, for just nominal expense.
[86] If you're attracting custom as a childminder, you really would be in business.
[87] And could then claim
Unknown speaker (G4JPSUNK) [...]
John (PS1WR) [88] Pardon?
Unknown speaker (G4JPSUNK) [89] If you've got more than two, you are anyway.
John (PS1WR) [90] You are anyway yes.
[91] You, you really are, yes.
[92] You, you've co you've commercially organized yourself, therefore you're in business.
[93] In which case you could claim the proportion of the house on expenses.
[94] ... Both the house expenses, the, the room and also provision of ... food and cleaning things for the ... presum for ... because of the involvement with children.
[95] You could be providing meals for them, I dare say they do do they, with child [...] ?
Unknown speaker (G4JPSUNK) [96] Mhm.
[97] Yeah.
John (PS1WR) [98] In which case, they'd go down as well.
[99] [...] . But it is this facility of er of you determining that an expense is, is generally for the business, therefore it can be claimed, so ...
Unknown speaker (G4JPSUNK) [100] If you, if you go over the fifteen thousand turnover,
John (PS1WR) [101] Right.
Unknown speaker (G4JPSUNK) [102] how important or desirable is it to use an accountant?
John (PS1WR) [103] Er not at all, I wouldn't think.
[104] If you're rel if you're reasonably intelligent, no.
[105] ... Because all, all
Unknown speaker (G4JPSUNK) [...]
John (PS1WR) [106] an accountant will do, is work on the information you give him.
[107] ... And he'll put it into a nice neat accountancy type form.
[108] But he can only, he can only do it on your information.
Unknown speaker (G4JPSUNK) [109] If you're fully aware of all the implications of the tax and what er allowances you can claim, then super.
Unknown speaker (G4JPSUNK) [...]
Unknown speaker (G4JPSUNK) [110] If you're not absolutely up to date,
John (PS1WR) [111] Oh yes.
Unknown speaker (G4JPSUNK) [112] your accountant is.
John (PS1WR) [...]
Unknown speaker (G4JPSUNK) [113] The accountant will then earn his keep.
John (PS1WR) [114] That's right.
[115] ... But in most small businesses it really isn't worth their while having accountants in.
Unknown speaker (G4JPSUNK) [116] Just keeping good accurate records.
John (PS1WR) [117] That's right, yeah.
Unknown speaker (G4JPSUNK) [...]
John (PS1WR) [118] Yeah.
[119] Yeah.
[120] If, if your, if your total turnover was sixteen thousand, then the inspector of taxes would want from you an account which shows how your fifteen thou sixteen thousand has been arrived at, who's paid you this money ... because he looks at those and he checks their accounts to see they've received it obviously, that's what it is, and wh how is your five thousand pounds made up.
[121] ... And if y if of the five thousand pounds, for an extreme example, four thousand pounds of car expenses, he'd ask you in and say hello, what sort of car have you got then?
[122] ... You know.
[123] But if it's a reasonable amount, say five hundred pounds, he would merely look at it and say fair enough.
[124] Not worth challenging.
[125] ... Unless you [...] .
Unknown speaker (G4JPSUNK) [126] If you've got four thousand pound car expenses, he might question [...] where you're paying the car expenses to [...] .
John (PS1WR) [127] Oh indeed yes.
[128] Yeah.
Unknown speaker (G4JPSUNK) [129] And whether you should be paying tax on it.
John (PS1WR) [130] That's right.
[131] Oh yes, yeah.
[132] Cos this is where the revenue gets its information about all sorts of tax [...] .
[133] I mean if you're a builder and you receive sixteen thousand, of, of that there's a thousand pounds from Joe Bloggs builder [...] whatnot, then the er the tax inspector will make a note, and pass on a little note to Joe Bloggs' file that, yeah he paid Bill Smith a thousand pounds, and i that then should appear in his accounts, and if it doesn't, then he's a ripe subject for being investigated.
Unknown speaker (G4JPSUNK) [laugh]
John (PS1WR) [134] So this is the thing you have to ... have to bear in mind.
[135] This is happening all the time.
[136] Obviously you'd expect the revenue to do this, wouldn't you? ...
Unknown speaker (G4JPSUNK) [...]
John (PS1WR) [...]
Unknown speaker (G4JPSUNK) [137] Er the b the more you do in cash really, the more the tax inspectors look at it.
John (PS1WR) [138] Oh well, yes.
[139] Because the, you've no means of, of proving have you that I mean y er the best system would never be able to discover that er your figure of fifteen thousand pounds cash taken selling ice cream was genuine.
Unknown speaker (G4JPSUNK) [140] Except that you do work on proportions.
John (PS1WR) [141] Ye oh yes.
[142] There is there is, yeah.
[143] Yeah.
Unknown speaker (G4JPSUNK) [144] I mean if you're doing something like selling ice cream,
John (PS1WR) [145] Yeah, there is, there is yeah.
Unknown speaker (G4JPSUNK) [146] [...] they have a lot of people which they say, you should make from [...] .
John (PS1WR) [147] You should be making within, within that range, within that,
Unknown speaker (G4JPSUNK) [148] And if you're not, they want to know why you're not.
John (PS1WR) [149] But it's only if it's materially out.
[150] ... If y you know if you're content to, to pocket five hundred pounds, they'll never be able to discover it in fifteen thousand.
[151] If you made er if you pocketed ten thousand, of course, it'd stand out a mile.
[152] Because you've not, you're not er in the same relative position as the next ... [...] .
Unknown speaker (G4JPSUNK) [...] [laugh]
John (PS1WR) [153] Anyway, I think I've dealt with that er er have I?
[154] Is that, is that good enough?
Unknown speaker (G4JPSUNK) [155] Yeah.
John (PS1WR) [156] But taking your point about er, you know you've got, you've incurred these expenses anyway, therefore at the end of the day, you're not that much better off than er
Unknown speaker (G4JPSUNK) [157] As I say, [...] well if you do go into business on your own, be extremely careful if you are thinking of ... [tape change] ...
(G4JPS000) [158] I wonder if I could go back to that point that er a couple of you raised this morning, about ... the transfer assets into the wife's name.
[159] You raised it, didn't you, Bob?
Unknown speaker (G4JPSUNK) [160] Yes.
(G4JPS000) [161] And I, I must admit, it left me somewhat confused.
[162] ... And can I b make it quite clear, that if you transfer assets into your wife's name, it has to be a pucker transfer into her name.
[163] You can't retain control of it at all.
[164] And therefore it has to be a separate account.
[165] But what John was saying this morning, and I think it wasn't ... with respect it didn't come over ... clearly to me, as clearly to me as I would have liked, and I was ... determined to [...] point was, what John was saying, the transfer of that, if that's capital, the transfer of that capital should be made into the wife's account.
[166] The income from it is then the wife's, therefore, if it happens to be three four four five, it is completely free of tax, whereas left with the husband would be taxed.
[167] But then what he then went on to say was, that since only the wife would be able to spend from that account, then put the ... money after it had been dealt with for the wife's tax purposes, into a joint account, on which both could draw.
[168] Knowing full well that a half would be the husband's, which would be taxable, the other half would also be the wife's, and would therefore be taxable if she'd already absorbed her three four four five.
Unknown speaker (G4JPSUNK) [169] You don't need the separate account, you just [...]
(G4JPS000) [170] You don't need a separate
Unknown speaker (G4JPSUNK) [171] to sign that's all.
(G4JPS000) [172] Yeah.
[173] Mm.
Unknown speaker (G4JPSUNK) [174] If she gives you authority to sign on [...] .
(G4JPS000) [175] It was this separate account that confused me.
Unknown speaker (G4JPSUNK) [176] Er it did me.
(G4JPS000) [177] Yeah.
Unknown speaker (G4JPSUNK) [178] I mean I
(G4JPS000) [179] Yeah.
Unknown speaker (G4JPSUNK) [180] it got me, [...] , I, I didn't say any more, but er
(G4JPS000) [181] I, I'm sure it was because he realized that if it was a sole account, you wouldn't normally be able t a husband and wife wouldn't be able to draw on it freely, but as you say, you could.
Unknown speaker (G4JPSUNK) [182] Yeah, [...] authority to sign.
(G4JPS000) [...]
Unknown speaker (G4JPSUNK) [183] She just gives you authority to sign.
(G4JPS000) [184] It has to be a genuine transfer of an asset.
Unknown speaker (G4JPSUNK) [185] It has to be in her name.
Unknown speaker (G4JPSUNK) [186] Yeah.
Unknown speaker (G4JPSUNK) [187] Erm mm.
(G4JPS000) [188] Okay, I, I, I'm glad, I, I'm glad I was confused on that point, because if I hadn't been, I might not have ... have er
Unknown speaker (G4JPSUNK) [189] I think he was worried about his ability to get his motorbike out.
Unknown speaker (G4JPSUNK) [190] To get his motorbike out of his wife's
(G4JPS000) [191] Yes, it was used in connection with that wasn't it?
[192] Er ... Well, I'm going to leave it that ... we're very very early, I hope
Unknown speaker (G4JPSUNK) [laugh]
(G4JPS000) [193] I hope you don't mind.
[194] I don't think you do, but er I really [...] we've, we've