Help needed with 'status' and Tax Return/Tax Credits....

[Deleted User]

Sorry if this is in the wrong place.... wasnt sure where to post...:o

Friend of the family filled in DH's tax return and completed a profit and loss account for him (no probs with that he is an accountant), he put down that I earnt £4800 from doing DH books etc, obviously to bring profit figure down for DH so less tax to pay etc.

I was self employed (for that period) and my profit was £98.11 after allowable expenses taken off. When I spoke to friend who completed DH tax return he said I was classed as 'employed' for DH work and self employed as the other so have filled in the tax return accordingly.

BUT then with Tax Credits what do I say when I phone them?? Not officially employed by DH with P60 etc etc, so do I give them both figures as 'Self employed' income for me? want to give them final figures by the end of the month.

So sorry to waffle on just really confused!! Hope someone can help1

Loopy

mrkbrrws

The income for Tax Credits really has to match what is on your Tax Return or you are asking for HMRC to make enquiries.

Your £4,800 is income from employment. I assume your self-employment is not bookkeeping/admin work.

no-oneknowsme

Friend of the family filled in DH's tax return and completed a profit and loss account for him (no probs with that he is an accountant), he put down that I earnt £4800 from doing DH books etc, obviously to bring profit figure down for DH so less tax to pay etc.

No advice OP but just wanted to say....Your OH pays you £4,800 for keeping his books for him per year???

Wow.....im underpaid lol i keep my OH's and get nothing:rotfl:

[Deleted User]

Thanks for advice!

Ummmm yep thats what he put down. Apparently you can draw an allowance for doing books (I have no idea thats just what DH was advised). I used for work the an accountants and manually type peoples profit and loss accounts and that was common practice.

Yep def overpaid

Loopy x

no-oneknowsme

But surely its not just as simple as your husband paying you to do his accounts....

You would then have to include this money "earned" on your own tax return?

Your Husband would then be classed as your "Employer" which means he would be liable for Employers NIC ?

You would also have to include this £4800 that your Husband is "paying" you on your tax credits claim form which in theory means that your income is going to be classed as £4.8k higher?


I would be careful with this one OP......

mrkbrrws

Yes you include the earnings on your tax return, but as long as your total income is under £6,475 there is no tax to pay.

No NICs are payable on earnings under £110 per week.

The income for tax credits doesn't change because the extra £4,800 reduces your spouse's income by £4,800.

Where you do need to be careful is if HMRC disallow the expense in the husband's tax return because either a) it wasn't actually paid or b) the salary is excessive given the work done and therefore is not 'wholly and exclusively for the purpose of the business'.

no-oneknowsme

But as an EMPLOYER would her Husband not have to pay NIC's ?

chrismac1

Not on earnings below 476 per month. So long as the work is valid - and if she was a bankler 4,800 would only take her 5 minutes! - this should all be fine.

[Deleted User]

Thanks for your help everyone. I have filed my tax return as employed by DH and also my own self employment.

Hopefully it wont be disallowed as the money has been paid and have got records of this... I did do some work too. (Trying to find old reciepts in van, did all the invoices, banked all the cheques, chased people up and even picked up materials from the merchants with a tiny baby in tow! :cool: )

Thanks again

Loopy