Self Admin Warranty

[Stephen 21]

So if you remove it from balance sheet, but have the unexpected bill in that month aswell there wont be issue with tax as you have the bill to put in accounts

[justina3 518]

24 minutes ago, Stephen said:

So if you remove it from balance sheet, but have the unexpected bill in that month aswell there wont be issue with tax as you have the bill to put in accounts

I think we need a pint to sit down and bash this out, still cant see that working it doesnt matter if you have a bill to go into expenditure the fact is you had funds sitting in an account which came from sales that didnt attract any levy of tax

[Stephen 21]

Not sure on this would have to check but an accrual is a cost so it would also reduce vat bill, in theory each car is costing you x amount to but x amount to prep, repair etc. So the £50/£100 a car would be a cost

They are accrued incase it happens. So you don't pay corporation tax on them till you take them out of being an accrual. I accrue for various things that ie heatings a bit dodgy and will need replacing or repairing so accrual £350 a month, run a van so accrue £75 a month for service, repairs. Its commom practice reduces monthly profit and when you do have to reapir heating you've saved enough to not worry about it. I accrue £650 a month for accountant and book keeping, so I know exactly my fixed costs monthly and never get bills that worry me

[Stephen 21]

You can accrual it but would have to release if after the warranty period has expired. Other things like heating repairs can be accrued for 6 years plus current year and only need to be released when the business ceases to trader from what I can gather, hence why I pay an accountant, they massively reduce tax bill legally of course

[Arthur thicken 13]

On 13/02/2018 at 4:38 PM, grant8064 said:

Hi Guys,

We're currently with RAC for warranties offering 6 months on 3K + cars but it's costing us a fortune per year and we end up having to take all the calls, moans and deal with the claims ourselves as most customers refuse point blank to deal with them themselves. Last year we did approx 40k in warranty costs and had payouts for claims not totalling more than 10k, plus it's always a struggle getting them to play ball.

We want to self admin warranties putting a figure of £100 per vehicle into an account and building a fund to use. We'll still be doing the same donkey work as we are now but hopefully will be better off financially and be able to be a bit more flexible about what we pay out on.

Question is are the Lawgistics books any good? We use Lawgistics for our legal stuff and find them helpful. Any other recommendations?

Any tips, tricks, hints or things we need to be aware of?

Cheers

Hi, been doing our own dealer guarantee for ten years, we get Lawgistics to supply the book, we order in bulk, I think the cost per book is about a fiver. We put £150 per car into a pot, it builds quickly. We do pre prepare our cars and have few moans. If you have a skinny month you can draw down on the pot as and when, it definitely works for us.