Must I declare Christmas present cheque?

larmy16

Hi

Self employed but work reguarly all year round for a client. They paid me my usual wage this week but in my Christmas card there was a cheque for £50 as a thank you.

Do I have to pay tax on this cheque?

Cook_County

Why do you think this is self-employment as against employment?

glider3560

Cook_County wrote: »

Why do you think this is self-employment as against employment?

Could be a regular customer?

larmy16

Because I am self employed but do some work for this person weekly.

I pay my tax, NI etc myself.

I just wondered if as it was a gift I have to pay tax on it.

McKneff

If its a gift, i wouldnt have thought so.

Presumably you have a personal account as well as your business account,
just put it into there.

Write on the back of the cheque (just in case) gift from xxxxx

Rolo_Tomasi

I would say its a tip/bonus therefore is taxable.

roger196

Search "easter offerings" under www.hmrc.gov.uk
Although these are employee cases, the same principles might well apply especially as your self-employment looks more like employment to me ( wages, one client). Is it a "gift" or a bonus for work done disguised as a gift. From a pragmatic view for £50, the potential loss of tax is hardly going to worry the revenue. If you are higher rate the tax is £20, it costs more to write a letter of enquiry. However they would take a different view if the "gift" was £10,000 or £50 was paid to each of 1000 "employees". From a paye audit viewpoint on the "employer", the major loss of revenue is "self-employment", especially loss of NIC class1A and B compared to NIC class4

larmy16

Roger I work for this lady for 3 hours per week. She is among many of my clients. Without going into details of my self employment ( that sounds worse than it is!), I shall just put the cheque through my books. Then there can be no mistake.

Maybe I should not have used the word "wage" as it seems to have confused the issue - sorry.

Thanks all.

fengirl_2

I would say its income of the business - would she have given you the money if you didnt work for her?

zenmaster

fengirl wrote: »

I would say its income of the business - would she have given you the money if you didnt work for her?

Surely that would also apply to posties, binmen etc who often receive Christmas tips. I doubt any of them are declared as income.

PS: I could be wrong about this!

larmy16

Had she given me for the sake of an example, an expensive pair of gloves, a luxury box of choccies and a bottle spirits, then that would be no problem, even if they amounted to £50. That would be a legitimate gift but money would not. Seems strange but I am still going to declare it.