Mystery Shopping Thread 21 *PLEASE READ THE OP FIRST**PLEASE NO CLIENT NAMES OR FEES*

Boredupnorth

There are certain expenses that I claim over the HMRC recommendations for as I feel that I can justify them if I ever need to. These include the difference between the mobile package I would need if I did not do MS work and what I have now which is virtually unlimited everything. There is a £15 a month difference for that. I also have unlimited broadband which is another £10 a month. Without doing MS work I would not need unlimited. I also claim the total 3G cost of my iPad as without MS work I would not have 3G.

I guess in reality it all comes down to is what you are comfortable with, if you are confident you can argue the case successfully then go for it but be prepared, if it ever comes down to it you will need strong justifiable arguments that you may or may not win.

spender

Right clarification for me please.

If I am being paid say £20.00 fee but I must spend £10.00 on purchases as part of the assignment, how do I show this for tax. Do I deduct the £10.00 compulsory purchases and show tax being paid on the £10.00 left over after deductions or do I show the whole £20.00 and pay tax on that after mileage, printing costs etc are factored in?

I need very plain English, I am an older bird!

marvellousaunt

spender wrote: »

Right clarification for me please.

If I am being paid say £20.00 fee but I must spend £10.00 on purchases as part of the assignment, how do I show this for tax. Do I deduct the £10.00 compulsory purchases and show tax being paid on the £10.00 left over after deductions or do I show the whole £20.00 and pay tax on that after mileage, printing costs etc are factored in?

I need very plain English, I am an older bird!

I have a spreadsheet where I list:

TOTAL MONEY IN (Total fee including reimbursement)
TOTAL MONEY OUT (Mileage, printing costs, money spent on the necessary purchase for the job etc)

MONEY IN - MONEY OUT = PROFIT. This part is the taxable part.


That's what I do - others may disagree

sparklysaver

Just dropping in to say thanks for all the tax info, and to the person who started this discussion, because I was reading on the HMRC site and searching through old threads to find this out myself and hadn't managed to come to any definitive conclusion. Very useful, thank you everyone. I'm a way off having to complete my first tax return but I'd obviously rather keep accurate records now - don't fancy having to work it all out retrospectively! Think I've just about got the hang of it now, though.

Spender, the way I'm reading it (as someone who's new to this as well) is that your hypothetical £20 job has two elements - a FEE of £10 and a required purchase of £10. Therefore, you can demonstrate that you're taking the job FOR THE FEE of £10 and the other £10 is an incidental expense, required in order to earn the £10 fee. You would therefore make your deductions (mileage etc.) and pay tax on what remained of your £10 FEE.

If your £20 job had a required purchase of £18, say, you'd have a harder time demonstrating that you're doing the job to earn the fee of £2, rather than to get the £18 item you are purchasing for 'free'. This would be likely to make the £18 item a benefit in kind, which is therefore taxable. In that case, you'd probably want to make your deductions and pay tax on what remained from the entire £20 payment.

I'm sure someone who's done this more than me (who hasn't done this at all ) will be able to confirm my explanation or correct me if I'm wrong though.

EDIT - haha, yes, the cross-posted explanation above mine is somewhat simpler. I never use one word when an entire paragraph will do. :rotfl:

Got my first two jobs tomorrow after a couple of weeks off so hopefully I'll remember what on earth it is I'm supposed to be doing. :rotfl:

Lawpf2001

Is anyone having problems logging into RE? Haven't been able to get on for like the last 3 days.

HappyMJ

I did a hotel job last month. £150 all in....dinner, drinks, bed and breakfast.. The hotel was a 5 minute walk from my house. Not even worth getting the bike or the car out for. There was no fee. The bill came to £150. I claimed £150 as income and £150 as expenses. No profit. I don't have a spare £30 from that job to send to the tax man. Where would the £30 come from? I did the job to hopefully get more work and to have a night out at the local hotel.

As far as household expenses go I claim £35 a week (about £1 per hour) plus half phone and broadband over all my business activities not just mystery shopping. If I were to break down what is mystery shopping and what is other self employment then MS part would be about 20% of my turnover and therefore expenses (although about 50% of my time). So £7 a week. But....I don't need to break it down as my accounts as presented to the HMRC are 3 lines. Income, Expenses and Profit. http://www.hmrc.gov.uk/factsheet/three-line-account.pdf

misssarahleigh

Lawpf2001 wrote: »

Is anyone having problems logging into RE? Haven't been able to get on for like the last 3 days.

Fine for me.

Lil_Me_2

HappyMJ wrote: »

I did a hotel job last month. £150 all in....dinner, drinks, bed and breakfast.. The hotel was a 5 minute walk from my house. Not even worth getting the bike or the car out for. There was no fee. The bill came to £150. I claimed £150 as income and £150 as expenses. No profit. I don't have a spare £30 from that job to send to the tax man. Where would the £30 come from? I did the job to hopefully get more work and to have a night out at the local hotel.

and this argument would not hold up should HMRC ever question you. Wanting to have a good time does not mean that completing the job is good for your business.

You need to think of it in business terms. Why would anyone do work that does not bring in a profit? If the only argument you have for doing work is because you wanted a meal out/a night away/a free jumper then the benefit that you receive is not incidental to your business and therefore is taxable. It basically means that you get 80% off.

Mystery shopping is a business, not a means to have a good time for free despite what some companies would have you believe.

HappyMJ

Lil_Me wrote: »

and this argument would not hold up should HMRC ever question you. Wanting to have a good time does not mean that completing the job is good for your business.

You need to think of it in business terms. Why would anyone do work that does not bring in a profit? If the only argument you have for doing work is because you wanted a meal out/a night away/a free jumper then the benefit that you receive is not incidental to your business and therefore is taxable. It basically means that you get 80% off.

Mystery shopping is a business, not a means to have a good time for free despite what some companies would have you believe.

I'll take the risk.... I do the work primarily for the hours. I must do 30 hours a week to get working tax credits. My main job is 16 to 24 hours a week so I need a minimum of another 6 hours per week. Doing the hotel job added enough hours that week to get me over the threshold.

As I said before the council gets my full line by line accounts and they have never questioned it and they pay out much more than HMRC could ever potentially lose. Anyway, even if I did not allow those expenses I don't think my overall profit would exceed £7,475 anyway. I declare a total annual profit of £2,000 with turnover of £16,000 over all business activities. That is the number I put on my tax return, the number I declare to tax credits, the number that I give to council.

misssarahleigh

HappyMJ wrote: »

I did a hotel job last month. £150 all in....dinner, drinks, bed and breakfast.. The hotel was a 5 minute walk from my house. Not even worth getting the bike or the car out for. There was no fee. The bill came to £150. I claimed £150 as income and £150 as expenses. No profit. I don't have a spare £30 from that job to send to the tax man. Where would the £30 come from? I did the job to hopefully get more work and to have a night out at the local hotel.

As far as household expenses go I claim £35 a week (about £1 per hour) plus half phone and broadband over all my business activities not just mystery shopping. If I were to break down what is mystery shopping and what is other self employment then MS part would be about 20% of my turnover and therefore expenses (although about 50% of my time). So £7 a week. But....I don't need to break it down as my accounts as presented to the HMRC are 3 lines. Income, Expenses and Profit. http://www.hmrc.gov.uk/factsheet/three-line-account.pdf

Why didn't you just say that in the first place.

I'm sure the tax man will understand. It's not that you made a mistake in not paying the correct tax. You just chose not to because you can't spare the £30 to enjoy yourself at a swank hotel.

(that is exactly how they will see it. And I have a hard time contemplating how you will convince them otherwise.)