New future, New kit

[OUFC4eva]

A bit disappointed Darryl Eales has not got us a shorts
sponsor for both the home and away kits

[GodalmingYellow]

Well that looks like a well-established local firm keen to get their brand in front of the punters, and not a tax vehicle whatsoever, nosireee.

Tax vehicle?
There's scepticism, and outright paranoia.
Surely this is just the same sort of deal as Animalates: a decent paying sponsor couldn't be found so a company with connections to the owner was given the free advertising.

You sure?

Tyre companies can be classified as 'vehicle repair' and if their turnover is low enough they can register for the flat rate VAT scheme at a nice 8.5%, compared to the headline rate of 20%. So you can sell tyres to your mates at near wholesale prices, and make a decent profit out of HMRC while you're at it.

That's a rouge herring.

Firstly the vat status has nothing to do with sponsorship of football shirts. In fact it would be detrimental as under the flat rate scheme, Vat on expenses cannot be reclaimed, except for capital purchases in excess of £2k. So b n r would not be able to reclaim the vat on sponsorship charged to them by OUFC.

B n r is a new company so with low turnover is perfectly entitled to make use of the FRS. It's not a tax vehicle it's a Government simplification of the tax system, which like all of them are not simplifications at all.

And we have no idea if b n r have even applied for FRS, and even if they had they would lose VAT on tyre purchases from wholesalers (not to mention on other expenses incurred in setting up and running a new company) making the whole process pointless.

B n r might be regarded as a tax vehicle however in respect of corporation tax, with OUFC losses effectively being used to offset b n r profits by virtue of the "sponsorship" in the same way that Animalates was used last year. I've not got a problem with that provided the cash changes hands so it is real investment in the football club, but I suspect OUFC will not benefit from it.