Self employed question

karinelleno

My husband runs a very small business as a landscape gardener, he has another person working with him on a self employed basis.

The person that works with him sends invoices at the end of the week for the hours that he has worked which we then pay to him.

He has asked us now to provide him with proof of payment which he can use for his accounts.

I have no idea what to provide him with as I thought that he should be recording himself when the invoices that he has issued are paid as we keep a record of our invoices that are paid from our customers.

Can anyone help?

Cazza

Yes, he should keep records himself, hopefully he will start doing so now!

In the meantime, have you kept copies of the invoices he has given you, could he photocpoy these? if you pay him via online banking, will it let you bring up a record of the payments you have made to each payee, you could then print off the transactions which relate to him. If you've paid him cash and not kept copies of his invoices to you, have you recorded in your books the amount you have paid to him, would a copy of this be any good?

Is this because he basically doesn't know what he's earnt for the year, so is trying to work it out, or has he been asked for paperwork by the taxman? It does really depend what purpose he needs it for too! What good enough for him might not be good enough for the taxman if they've asked for additional paperwork!

FOURCANDLES_2

This is a bit odd has he got it right? he does work for you he invoices you for work he has done you pay him he then receipts you . So his proof is his invoice and his own receipt book this is all he needs. Unless of course he is implying you are his employer and he is your employee , you need to check this is not the case and he is registered as self employed or you will be liable for employee deduction/holidays etc . They are at the moment pushing through new guide lines for people who are working for a person on a regular self employed basis to make the employer liable for holiday pay. Check this out or break the regularity of his work pattern

karinelleno

My husband has spoken with him and he has said that his accountant has asked him to get this as extra proof of income.

He was paid cash so we have no record through our bank to provide, what else could I provide him with?

HappyMJ

A remittance advice and in future pay by cheque or BACS something that can be traced.

heretolearn_2

He's getting it backwards. He's the one who records receipts or creates something to acknowledge them. For example, he could give you a receipt for the cash you pay him. Or you could stop paying cash then his bank statements will show what he's received. Or he could immediately pay all cash into his business account (should do that anyway).

Cazza

His invoices to you are proof - have you not kept the invoices he issued to you?

Savvy_Sue

Does he work for other people, or just for your DH? Can he choose to turn work down without penalty, or send someone else if he doesn't want a particular job? Does he provide his own tools?

Because I'd be a bit concerned as to whether he was actually employed rather than self-employed. This link might help.

Premier_2

I'm not sure it is your role to provide him with any proof for his accounts.

However, paying him in cash is very risky. What would happen if, for example, a dispute later arises where he claims you have not settled any/all of his invoices? How would you prove otherwise?

If you must pay in this form, you really should be obtaining some kind of receipt. This could simply be him signing a log when each payment is made.

My concern is also whether this person is truly self employed, and not someone you are employing and paying cash in hand to. The link provided by Savvy_Sue above should help in this regards.