Company racing?

[johan]

Is anyone running their private race bike through a company, GST registered?

Is it even possible to set-up a company around a race bike, surely there will no or very little income which would make it hard to convince IRD you could keep running it?

Any ideas or stories how it can be done? cheers

[Wingnut]

Is it even possible to set-up a company around a race bike, surely there will no or very little income which would make it hard to convince IRD you could keep running it?

Dont you have to trade in someting, be it a service or goods, to be able to get GST reg.

Guess you could create an advertising company and sell advertising by putting plenty of stickers on ya ride???

[malcy25]

Is anyone running their private race bike through a company, GST registered?

Is it even possible to set-up a company around a race bike, surely there will no or very little income which would make it hard to convince IRD you could keep running it?

Any ideas or stories how it can be done? cheers

I've seen it done....things like GST I expect could be claimed back for all expenses paid which GST was charged on.

[KS34]

I'm thinking of doing this if the backing I'm trying to get at the moment comes through. You would have to be very transparent with your accounting and have a non-related person as the owner/shareholder/director of the company or FBT would be an issue. It makes sense though.

[Quasievil]

Yarp been doing it for years, promotion budget I think, kinda a related industry tho I guess but taxman accets it

[scuzeme]

I spent a whole half an hour formulating an answer to this post last night, only for the bloody thing to disappear into cyber space when i submitted it oh well here we go again.

At the end of the day IRD dont care if you have a Company that breaks even or runs at the loss they will however care greatly if you are GST registered and your submitting negative GST returns (claiming GST back) i have heard that they will automatically audit you if you file two negative returns in a row.
IRD are interested in taxing your profit, collecting GST and collecting PAYE
If you decide to start up a "Race Team" structured as a legal entity i.e a "Company" remember that a company is an fact an enterprise of some type that is legally set up to make a profit transparently.

There is no point forming a Company that has no revenue or not enough revenue to pay for the running costs of your racing season, i mean the money has to come from somewhere right? and if you lack the endorsements and sponsership its going to come out of your pocket, any money that you as a "Director/s" put into the Company is a " Capital injection or cash asset which will be taxed!

If you have an existing profitable Company you can run alot of your racing costs through it, my accountant tells me that i can claim (wait for it) 5 whole percent back on sponsership but if you look at it as "advertising" on a very fast mobile billboard you can probably claim a hell of a lot more, i mean my whole racing budget bike and all would be less than the cost to run a giant advertisement on the side of a building in the Wellington CBD for one month!
The other thing about having an existing Company (if you in the roading industry like me) is you can write off a shit load of things under the umbrella of your normal business operation like fuel, oil, repairs etc.

Quasi's in a good position because of the business he's in, its directly related to the sport!

Hope this helps.

As a footnote you dont have to register for GST until you have revenues of over 20K.

Cheers

[johan]

Hey thanks guys. Some very helpful answers!