Franchise License Taxation Allowances

Posted by Carolynne PM | on Wed, 04/05/2011 - 19:29 1188 3 comments | report

Hello

I have just taken on a client who has bought a franchise license for £10,000, which will expire in 5 years. He is a Sole Trader.

I will be treating this as an intangible fixed asset and write it off in the accounts over a 5 year period.

However, I have read somewhere that there is no tax relief unless it is purchased through a Ltd Co.

The Question is:

Does this mean, there are no reliefs of any sort for taxation purposes? Is there anything I can use to reduce his tax bill, in light of this purchase?

Many Thanks for your advice in advance.

Carolynne

Comments

correct - mostly

mr. mischief | Wed, 04/05/2011 - 20:43 | Permalink

I think you are mostly correct. However, does any of the fee relate to revenue items such as training or HR / admin. support - which can potentially be written off to profit?

That part which is a licence to operate the business is an intangible in my view.