The law for pricing

[pk70]

Lets say I sell something, like softwares or services etc. What is the biggest price tag I can put legally speaking on my products or service? This is what I want to know...

Like is it legal to sell my computer program I have made for £4000 ?

 

[pk70]

Like can I draw a painting and sell it for £5000 even if its rubbish really ?

 

[davek17]

If you write a software application or service then you can charge what you want for it.

The only time I can think of where you would need to consider the price or set an RRP or top price is if you sold through distribution or some kind of affiliate/franchise deal where you would have to create a fair playing field for your resellers.

The only other thing I would say is that you have to research your market, find out what's out there and set your prices accordingly. There's no point charging £1000 for a piece of software when there are 100's of other options all charging £10. You'll never sell anything!

 

[Billmccallum]

The very basic law....Supply & Demand.

You can charge what you like, but finding a customer who wants to pay that price is the key to any business.

 

[pk70]

If you write a software application or service then you can charge what you want for it.

The only time I can think of where you would need to consider the price or set an RRP or top price is if you sold through distribution or some kind of affiliate/franchise deal where you would have to create a fair playing field for your resellers.

The only other thing I would say is that you have to research your market, find out what's out there and set your prices accordingly. There's no point charging £1000 for a piece of software when there are 100's of other options all charging £10. You'll never sell anything!

This is interesting, and I hope its true. So are you saying that I could write a progams for my clients to get big money for my own business? To be honest, I cannot believe its so simple . Many people would use this to avoid gift taxes: just sell something and tax problems are over. How is that? Lets say you want to give a gift of £200000. So you could just buy something from your friend for that price to do that? to avoid taxes... There must be some rule that this is not possible

 

[pk70]

The very basic law....Supply & Demand.

You can charge what you like, but finding a customer who wants to pay that price is the key to any business.

Its not about that I was after hear . Its about the trick to give money to somebody else using selling/buying as a means to do that. Would this be legal?

 

[kulture]

I would guess that it would not be legal. HMRC may decide that the value of the item "sold" is less than the amount paid and thus tax you. Also if you "sold" something then you would be taxed on the income gained from the sale. There is no simple, legal solution to getting money without having to pay tax.

 

[akirk]

pk70 - you seem to be asking this same question in a number of threads
they all seem to be around wanting to save tax - could I suggest that you probably need to speak to an accountant?

if it seems illegal - it probably is - especially based on the ability that HMRC seem to have to declare anything illegal they don't like - I have a feeling that the Labour Gov. passed a law meaning that if you find a loophole in tax it is illegal to not inform HMRC and therefore close it - can't remember details - but ultimately they will get tax off you if applicable

you can sell any item for whatever amount you want, but that won't stop them taxing you as though it was done differently if they feel you were trying to evade tax.

it would be fastest for you to get professional advice

Alasdair

 

[pk70]

pk70 - you seem to be asking this same question in a number of threads
they all seem to be around wanting to save tax - could I suggest that you probably need to speak to an accountant?

if it seems illegal - it probably is - especially based on the ability that HMRC seem to have to declare anything illegal they don't like - I have a feeling that the Labour Gov. passed a law meaning that if you find a loophole in tax it is illegal to not inform HMRC and therefore close it - can't remember details - but ultimately they will get tax off you if applicable

you can sell any item for whatever amount you want, but that won't stop them taxing you as though it was done differently if they feel you were trying to evade tax.

it would be fastest for you to get professional advice

Alasdair

No, and I said already this earlie, this is not about taxes. This is about *me getting capital for my business from the people I know, like friends and relatives*. And then when I get success in my business to be somehow able to send them part of the profit. Thats what its all about.

 

[akirk]

fine:

they write you a cheque
when you have the money - you write them a cheque

sell them shares / take a loan / etc.

then pay taxes as appropriate

nothing difficult about that

Alasdair

 

[davek17]

PK70

I misunderstood you but I do now. You are trying to "sell" a piece of software to someone to try and "avoid" tax by paying them, say a salary. I guess this poerson is either you or a close friend/relative or girlfriend?

This is very unethical to start with and the TAX man will get you for this if it takes a few years to do it. The TAX law is not there to be bent and beaten, it is there for a reason and businesses now have a duty to HMRC to be seen to be working in the best interests of what is correct. Anyone trying to bend the rules, no matter how legal, are viewed very poorely anyway and the tax man will just take the money off you if he wants to and he would be right in this case to do so.

It also makes no sense anyway because you would have to pay corporate tax and either PAYE or dividends to get the money out where-ever it goes so you'll just end up in a world of pain here.

Pay your taxes like the rest of us, its exactly this sort of thinking that ruins the country for everyone.

 

[kulture]

fine:

they write you a cheque
when you have the money - you write them a cheque

sell them shares / take a loan / etc.

then pay taxes as appropriate

nothing difficult about that

Alasdair

AND has the added benefit of being legal, AND not taxed. You dont have to pay taxes on a loan to start up a company, nor on someone investing int your company in return for shares. They may have to pay taxes if you make profits and give them dividends etc on the shares. They would not have to pay taxes if you pay back a loan.

The best advice is see an accountant and stop trying to come across as someone trying to dupe HMRC.

 

[JElder]

If HMRC see any transaction they think was arranged that way to avoid tax, they can and will levy tax based on market values.

So if you bought some software for £10,000, and the market value was assessed by HMRC as £10, they will send you a bill for tax on the difference in your profits for that year.

This assumes they catch you. Oh, and if they do they will charge interest as well. And a fine if it was deliberate tax evasion. And a criminal case. And Prison.

And the ONLY people who get to say if something is legal avoidance or illegal evasion? HMRC.