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My limited company client purchased a machine which cost around £20,000. The machine manufacturer ran a business promotion scheme whereby any purchasers, within a specified period, would have their name entered in a draw for a similar machine. My client's name came out of the hat and he now possesses an additional £12,000 machine. My client enquired as to the most tax efficient method of dealing with this transaction.
My limited company client purchased a machine which cost around £20 000. The machine manufacturer ran a business promotion scheme whereby any purchasers within a specified period would have their name entered in a draw for a similar machine. My client's name came out of the hat and he now possesses an additional £12 000 machine. My client enquired as to the most tax efficient method of dealing with this transaction. He suggested that he personally sells the machine to the company and credits his director's loan account with the proceeds thus enabling the company to benefit from capital allowances and he would benefit from the value of the machine. He justifies this by claiming that the true cost of his business production is shielded by the value of this machine if he simply includes it in his business without the business paying for it.
My opinion is...
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