Badges Of Trade Legislation And Vat

Financial Instruments A financial asset is something which is defined as an entitlement of future cash flows. However, a financial instrument is a broader term used to describe financial assets and other assets in which there are no organised secondary markets to trade them. However, a financial security is something that can be traded in a secondary market. Attributes of Financial Assets Financial assets are those that: • • • • Have a return of yield expressed in terms of percentage. Have risk in which there is probability the actual return will differ from the expected return. Are liquid in that they can be sold at current market prices with reasonable transaction costs. Are expected to have a set time-pattern of cash flows in or out.

Investments. “The analysis and process of choosing securities and other assets to purchase.” (Cornett, Adair, & Nofsinger, 2016, p. 7).

Samuelson believes that the assets definition should concentrate upon property rights that are concerned with wealth, which provides a true balance sheet orientation, rather than being concerned with revenue generation, Samuelson’s definition may lead to an exit value orientation for assets. One of the key points about the property rights approach lies in exchangeability of the asset. Samuelson’s viewpoint would result in certain deferred charges being expensed immediately even though their incurrence may bring about future economic benefits.

Sole trader is where a business is run as an individual; so that all profits are their own after tax has been paid on them. Within a sole trader organisation it is possible to employ staff, as the sole trader only means that you own the business personally and do not actually have to work by yourself.

Assets are to be recorded and valued based of the type of asset there are.

Whether a present is bought at a store or crafted by hand, there is still a great deal of valuable thought and meaning behind it. Unfortunately, nowadays most people believe that a price tag is what dictates an object's worth. However, value is determined by at least one person's perception of worth because relationships are valuable, history increases value, and the public's desires decrease value.

Self employed - if you are not employed in a contract of employment with an employer but contracted to provide services other a period of time for a fee or be a business in your own right. Therefore a person will work for themselves rather than a employer. You do not have employment rights but have to pay your own income tax and national insurance contributions.

As there are so many different employment status types, it is important to determine the status as “employers will be exposed to the majority of employment rights only if the 'working person' can prove they are an employee rather than self-employed.” (CIPD, www.cipd.co.uk, Why is employee status so significant and what legislation covers it?, 24th Sept 2014.

Also briefly indicate how your advice would change if other assets became available to the investor.

Gold, Da Vinci paintings and a signed Cristiano Ronaldo jumper are all considered as ownership investment - provided that these are objects that are bought with the intention of reselling them for a profit. Precious metals and collectibles are not necessarily a good investment, but they can be classified as an investment nonetheless. Like a house, they have a risk of physical depreciation (damage) and require upkeep and storage costs that cut into eventual profits.

Niall Ferguson clearly illustrates several economic principles and findings that are also illustrated in our Macroeconomics class. These concepts are seen in Episodes 5 and 6 of The Ascent of Money of money series. “Safe as Houses” and “A Financial History of The World” are both episodes that Ferguson uses to emphasize concepts that are also seen in our Macroeconomics. Some of the concepts that are seen in these episodes are property ownership and the finances that come with the ownership of property. Because of these two episodes it is easy for me to understand these concepts.

When providing the distinction between the above charges the two stage process of legal characterization developed in Agnew must be applied by the English courts. The object of the first stage of the process is to ascertain the nature of the rights and obligations which the parties intended to grant each other in respect of the charged assets. Once these have been ascertained, the Court can then embark on the second stage of the process, which is one of categorization and designed to attribute the correct legal label to the package of rights and obligations. Lord Millett’s reasoning has been approved by the House of Lords in Re Spectrum in which emphasis was given to the freedom of the company to deal with the assets in the ordinary course of business rather than the two first criteria focusing on the nature of the secured assets.

According to this concept the asset is recorded in the books of accounts at the price paid for it and not at its market value. For example: if a business entity purchases a building valued at $15 million from a friend for $12 million, this asset would be recorded at $12 million and not at $ 15 million, because for the business entity the cost was $12 million and not $15 million.

*Lack of tangible assets which can be seen, touched, smelled, heard or taste prior to purchase. E.g., education, air

Ali is a habitual renovator and restorer of old boats for the purpose of reselling. However for VAT purposes, it would need to be established of ali is trading or not. The badges of trade are seen as an acceptable way of judging whether or not a person or entity is indeed ‘trading’. These badges of trade were identified in 1955 by a report conducted by the Royal Commission on profit taxation. They have since grown and developed over time through Case law. There are 9 main badges of trade which can used to establish weather ali is carrying on a trade or not. These are indicators or guidelines used to establish whether a trade is being carried out.