You Say Potatoe, I Say….
This little news bit isn’t really relevant for us in the U.S. but the spirit of the dodging taxes (legally) and making the most of what you have still lies at the heart of this NYT article.
Unfortunately, the crafty lawyers at Proctor and Gamble have recently lost a ruling which sought to remove the “potato chip” classification from Pringles in order to avoid paying VAT (Value Added Tax). The judge ruled that the greater than 40% potatoe flour content in the chips exceeded the standard of “potatoeness”.
A quick scan of the ingredients lists of Pringles did not turn up anything too alarming (besides vegetable oil being the second largest percentage of the ingredients).
Due to the ruling, the company now owes $160 million to the British government. Ouch.
Take this ruling to heart and be careful with what you deduct in your own taxes. I was recently propositioned into joining a multi-level marketing plan to run my own business. The pitchman reminded me of the tax benefits of owning ones own business including home office and utility exemptions, mileage deductions, etc. However, these deductions can be abused and if you are audited expect serious penalties. For example, mileage to and from a regular work place cannot be deducted. A “business” vehicle that you also use to go buy groceries on the weekends will not qualify either in the eyes of the IRS. In fact, if you are an employee and your workplace ends up giving you a company car and allows personal use, that is actually a taxable benefit.
In closing, check with a tax professional if you are attempting to claim business deductions.
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