City & FFP | 2020/21 Accounts released | Revenues of £569.8m, £2.4m profit (p 2395)

[Didsbury Dave]

Re: City & FFP (continued)

Not quite DD, you'd have to buy £16k worth of ladders :D

No you wouldn't.

You'd put the 2k as a one off expense and wipe out your profits.

Technically the ladder's cost should be accrued/depreciated, but it was just a simple example.

A better one is that you spend £2k on a local radio advert.

But we are deviating from the point ;-)

 

[aguero93:20]

Re: City & FFP (continued)

Not quite DD, you'd have to buy £16k worth of ladders :D

No you wouldn't.

You'd put the 2k as a one off expense and wipe out your profits.

Technically the ladder's cost should be accrued/depreciated, but it was just a simple example.

A better one is that you spend £2k on a local radio advert.

But we are deviating from the point ;-)

Hmmm, may be slightly different in the uk but a capital expense for tax purposes usually can't be written off in one year, here fixed assets have to be written off over 8 years (depreciation is totally different to capital tax allowances btw).

 

[Dribble]

Re: City & FFP (continued)

I don't think it's normal practice for football clubs, but it's certainly common for multinational corporations looking to avoid tax. Starbucks UK has never made a profit in 15 years in the UK, for example, instead paying "image rights" to a company based in a far lower tax country to keep their official profits down. Dodgy as fuck, but crucially, still legal. Personally, I have no problem with City using dodgy accounting to get round what are essentially corrupt as fuck regulations.

Correct mate. Most good private businesses do it the other way. They use creative methods to bring down their stated profits as much as possible, for the simple reason that it reduces corporation tax. I will give you a very simple example: let's say you run a window cleaning business and have made a £2k profit. That means you owe the taxman £400 at the end of the year in corporation tax. But if you need some new ladders, if you buy them in the last month of that financial year and they cost £2k, then that brings your profit down to break even and you owe the taxman nothing.

This is overly simplistic but that's what everyone does. City are doing the opposite.

It's meeting fire with fire though. FFP in itself skews normal accountancy and business practices by effectively banning shareholder investment. If you have a warped set of regulations, it'll be met by directing the accounts to comply with those. That's what accountants do.

This.

 

[Didsbury Dave]

Re: City & FFP (continued)

Not quite DD, you'd have to buy £16k worth of ladders :D

No you wouldn't.

You'd put the 2k as a one off expense and wipe out your profits.

Technically the ladder's cost should be accrued/depreciated, but it was just a simple example.

A better one is that you spend £2k on a local radio advert.

But we are deviating from the point ;-)

Hmmm, may be slightly different in the uk but a capital expense for tax purposes usually can't be written off in one year, here fixed assets have to be written off over 8 years (depreciation is totally different to capital tax allowances btw).

It's a bit different here but not much. Was keeping it simple for the non business people.

The radio advert example is better if you want to be pedantic ;-)

 

[HalfwayUpTheKippax]

Re: City & FFP (continued)

Not quite DD, you'd have to buy £16k worth of ladders :D

No you wouldn't.

You'd put the 2k as a one off expense and wipe out your profits.

Technically the ladder's cost should be accrued/depreciated, but it was just a simple example.

A better one is that you spend £2k on a local radio advert.

But we are deviating from the point ;-)

You might as well pay your £2k tax bill than spend it on a local radio advert as that would leave your net income the same with no increase in assets. And if you only make a £2k profit then I don't think you need £16K ladders.

Hopefully that was irritating enough. BTW I agree with your original point!

 

[Leyther]

Re: City & FFP (continued)

If you paid your taxes - you'd be £1600 better off than buying something you didn't really need though - I'm not a window cleaner - or an accountant BTW.

 

[gordondaviesmoustache]

Re: City & FFP (continued)

[bigimg][/bigimg]

Not quite DD, you'd have to buy £16k worth of ladders :D

No you wouldn't.

You'd put the 2k as a one off expense and wipe out your profits.

Technically the ladder's cost should be accrued/depreciated, but it was just a simple example.

A better one is that you spend £2k on a local radio advert.

But we are deviating from the point ;-)

Hmmm, may be slightly different in the uk but a capital expense for tax purposes usually can't be written off in one year, here fixed assets have to be written off over 8 years (depreciation is totally different to capital tax allowances btw).

I think you might be ok to put a set of ladders against revenue expenditure, mate ;-)

 

[DaveRave18]

Re: City & FFP (continued)

If you paid your taxes - you'd be £1600 better off than buying something you didn't really need though - I'm not a window cleaner - or an accountant BTW.

I think we can tell you are not an accountant.

Where do you live, so I can double check the first part of the claim? ;-)

 

[adammck]

Re: City & FFP (continued)

We are going to be fine.

With money comes big contacts... With big contacts come big contracts.

UEFA are trying to make an example of us. We will be fine but it looks like it might drag on a while. The future is blue whether they like it or not.

 

[BertTrautmann'sParachute]

Re: City & FFP (continued)

So, as things stand, UEFA are going to fine us £50 million because we tried to claim back some tax on a pair of ladders? Seems fair.