Tax on expenses

DullGreyGuy

Andy_L said:

Silenthill said:

Hi
Im starting an online business and am partnered with someone abroad.  His fees are 40% profit and he does everything.
So my question is, if I give him 40% profit and he invoices me for the amount, will I pay tax on it. Because its an expense?

Sounds well dodgy. Are you about to be scammed?

The "scamming" could go either way, if the person only gets 40% of the OP's profits then there could be high salaries, frequent company car changes etc all of which eroding the profit to then be shared. 

It does raise the Q of what value the OP is adding and why the supplier would continue being a supplier rather than cut them out

Andy_L

DE_612183 said:

QrizB said:

Andy_L said:

Silenthill said:

Hi
Im starting an online business and am partnered with someone abroad.  His fees are 40% profit and he does everything.
So my question is, if I give him 40% profit and he invoices me for the amount, will I pay tax on it. Because its an expense?

Sounds well dodgy. Are you about to be scammed?

I did wonder about that, too!

Depends if there is any initial outlay - but if the business model is:

I send you stuff
you sell it
you send me 40% of whatever you sell for
you keep 60% of whatever you sell for

Then you profit is the 60% - but you can't claim 40% of that is expense as you've already taken the 40% out.

We need a bit more detail to see how legal it is ( and also if it's that good I may want to try this myself! )

If it sounds to good to be true...