Question: Tax on scrap

ZoeB

Hello to you all.

I have a question regarding the newly imposed non-cash restrictions on scrap metal transactions (which I entirely agree with - theft is never acceptable).

My question relates to my partner, he is a sessional lecturer and technician for the local Further Education establishment, they regularly "cash in" their scrap to boost their budget and buy extra materials for the rest of the year. With the new restrictions, if one of the lecturers was to run the transaction through their own current account, would that then be classed as income and incur further taxation through ones tax return?

Thanks in advance for your input!

Zoe L. Brierley, m a a t

ExcelAnt

As he is not "profiting" From the transaction I would say that this is not personally taxable.

I'm kinda guessing as I do not have the experience, the only place I can see this as being accountable properly is the school/education authority as technically this is there transaction not his so long as he is not personally benefiting there is no personal liability. He should definitely attempt to keep some record of this so as to not be seem to be abusing the position. Profiting from public funds massive no-no in the current climate I think you'd agree.

Thinking broadly, it is in his interest to keep this completely off the record as the Authority may actually end up reducing his budget because of the recovery of funds through scrap, penalising his ingenuity, but hey that's government budgets for you! Regardless of what he decides there should definitely be evidence and witness to the transactions to keep himself "clean"

My two cents.

anniem

Scrap metal is a pain. The scrap dealers willingly seem to give you cash for it, but scrap metal is also subject to VAT! By rights you the person/business selling the scrap metal ought to be selling it with an invoice (VAT invoice if the seller is VAT registered) so that all input and output VAT is properly accounted for by both businesses!

Sorry, but there are two aspects of tax to consider and there's more to it than just the income tax implications. The scrap dealers know about the VAT issue, but continually bury their heads in the sand and ignore their obligations to account for VAT correctly.