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Is this possible? Would I be liable for tax?
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oasis1979
Posts: 53 Forumite
in Cutting tax
Please bare with me here, I'm just thinking out loud
I have a credit card with 0% on purchases
It has a £3000 limit on it but I'm only allowed to take out £500 cash
I'd like the full £3000 for a short term loan so my idea was as follows
I'm a web designer and I could hypothetically set up a page so that I could purchase an item (fresh air for example) using my credit card for £3000. That £3000 would be paid into my bank account. Hey presto I have a £3000 loan at 0%.
Question is, if I were to do such a thing would I be liable for tax on the sold item (fresh air)
I have a credit card with 0% on purchases
It has a £3000 limit on it but I'm only allowed to take out £500 cash
I'd like the full £3000 for a short term loan so my idea was as follows
I'm a web designer and I could hypothetically set up a page so that I could purchase an item (fresh air for example) using my credit card for £3000. That £3000 would be paid into my bank account. Hey presto I have a £3000 loan at 0%.
Question is, if I were to do such a thing would I be liable for tax on the sold item (fresh air)
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Comments
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Short answer - YesThis is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0
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ok thanks, I've been told the same elsewhere
was thinking I was being clever for a moment there :embarasse0 -
what kind of tax?
tax on profit? yes, if there is any profit. suppose you set up a new bank account for your fresh air business. when it receives the £3k from the credit card company, it decides to refund the customer, not by crediting their card, but by making a fasterpayment to the customer's bank account (i.e. to your personal bank account). then there is no profit.
VAT? fresh air won't be exempt, but £3k turnover wouldn't require you to register for VAT.
would this violate the credit card company company T&Cs, for the merchant or the customer, or both? i have no idea.
would the CC company charge a hefty percentage to the merchant? definitely.0 -
Could you not just do your regular spending on the card?0
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[QUOTE=grey_gym_sock;[URL="tel:63753631"]63753631[/URL]].
would the CC company charge a hefty percentage to the merchant? definitely.[/QUOTE]
This. Just do your 'normal' spending on the card and save the cash.
I expect the above could work fine but unless you have access to some kind of fee-free payment processing it'll cost you... Possibly enough that you might as well get a SBT card and avoid the hassle.0 -
Plus as well it might not technically be fraud, but you are definitely trying to get around the rules, so the CC co is unlikely to take a nice view on it if they were to find out.
You'd also have quite a lot of costs involved in processing the payment.0 -
If only "entrepreneurs" would spend half the energy they spend on tax fiddles in the growth of their businesses, wouldn't they thrive?0
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[QUOTE=le_loup;[URL="tel:63758578"]63758578[/URL]]If only "entrepreneurs" would spend half the energy they spend on tax fiddles in the growth of their businesses, wouldn't they thrive?[/QUOTE]
Heck if someone wants to point me in the direction of this reliable, fee-free payment processing (even if I have to write the code to interface with it) then please do and I can probably retire on the cc cashback from daily payment-to-the-limit/pay whole balance online. even at 0.5% (MBNA platinum?) that's £50 a day on a 10k limit for not a lot of ongoing work. And after a few months rinsing that, what would they give a man with a 300k/month paid-back-on-time revolving credit line...0
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