Tax from donations

Cook_County

Sounds to me like the £200,000 is trading income and subject to tax & NIC.

uknick

Why run this business as a sole trader and not set up a Ltd company?

The initial £200k could then be dealt with in a more tax efficient way, e.g. treat it as a form of non voting share capital or a loan for which you could claim the cost of the free rooms to the business as "interest" payments.

McKneff

Sorry, but you sound as if you have absolutely no idea what you are doing/talking about

uknick

McKneff wrote: »

Sorry, but you sound as if you have absolutely no idea what you are doing/talking about

Did you aim this at me? If so, why?

Pennywise

uknick wrote: »

Did you aim this at me? If so, why?

Your "advice" is completely flawed. You can't claim a free room as an expense in lieu of interest. Stop making things up. If you're going to give advice, then back it up with the link to the HMRC webpage or statute.

uknick

Pennywise wrote: »

Your "advice" is completely flawed. You can't claim a free room as an expense in lieu of interest. Stop making things up. If you're going to give advice, then back it up with the link to the HMRC webpage or statute.

You're both right. I couldn't have got it more wrong, confusing opportunity costs with actual costs. Major brain malfunction.

I shouldn't have used the word interest as that is completely incorrect. I was, extremely badly, trying to indicate how he could show his investors the cost of the free rooms to the business and how he would be making a loss when he couldn't rent them out to paying customers.

But, I still think setting it up as a limited company is an option he should investigate.

McKneff

Actually, my post of not knowing whatvyoure talking about was directed at the original poster.