Sub Contracting

deltatwo

Hi,

Am going to complete my tax return for 08/09 but during that year I had to take quite a lot of time off (family member ill) and sub-contracted work to some other people. Work was telemarketing based, and these people were paid in cash. This has obviously severely impacted on my profit and am wondering if I can put these figures in my tax return and what do they come under?

Also, am intending to go back to permanent employment from December this year, and if I cannot claim against the sub-contract work, my profits will be reduced, am assuming I can reduce payments on account because of this.

Lastly, I work from home mainly, and live in a 3 bedroom, 2 public room house, I understand I can claim a 3rd of mortgage interest, utilities and council tax is this definitely the case?

Thanks in advance.

fengirl_2

These wages are a legitimate business expense - most businesses employ staff. I assume you have records of the amounts paid and the names and addresses of the people paid in case you are investigated?
You cannot claim anything, but any expenditure you include in your accounts will reduce your tax bill. As far as the room for office use is concerned, if you are using one room for work all the time, you can include one fifth of your household expenses in your accounts, including mortgage interest.

tyllwyd

When you say that your subcontractors were paid in cash, to make sure you don't drop anyone in trouble with the tax man, I think you should make it absolutely clear to them that you will be declaring these payments on your tax return and that they should do the same.