What exactly does that mean?
I we charge them £1000 to offset their CO2 - how much can they claim against tax - all of it (effectively making the payment for the trees free - i.e. they would have paid the money to the tax man and now they pay it to us - so no material difference) or if not all - what percentage of the 1000 can bet set against a business expense for professional services.
Just what we needed to hear.
Actually Keith. Just need to further clarify something. We are not just giving advice & consultancy - we are purchasing the trees and planting them on their behalf. We provide a certificate to record the trees, location, number and amount of CO2 offset and the fact that they are Carbon Neutral for that year.
We own the land and we commit to managing those trees for at least 20yrs which will be when that amount of CO2 is offset.
Does this change anything?
The tress are never become the Customers property so not recorded as an asset.
Sorry Keith - not sure if I can answer another related question. Something I was thinking about over night.
If take the cost of planting the trees for the Customer is £1,000
If we take the profit the customer has is £1,000.
To pay us £1,000 remove the profit so they pay no tax on it.
However, if they didn't put h money to our trees they would be taxed on the £1,000 at 40% corp tax.
End result would be that the tax man gets £400 - they get £600.
So the end result of setting this off against tax is that they only really get £400 benefit per £1,000?
Is this correct?
That's disappointing as I see it as very much part of the same question - that if we'd been having a chat about it (rather than slightly stilted emails) would have all come up, as the conversation developed, in less than 5 mins.
I'm afraid I'm not going to raise this as another question.
Just poorly worded question - which is a weakness of the system.
I have opted out of this question.