Am I being robbed?

Empress3

I am in my first year of being self employed but I work within an established business. I pay 50% (a very large sum) of my earnings into this business as a rent for my room, overheads for the property, insurance etc. I have been told not say that I pay anything to that business & that I am simply working from home, I can only assume that this is because they do not declare that they receive this money. Should I be able to declare this money? Would I get a tax rebate on this money? Is this effecting my actual registered income? I feel like Im the one losing out here!

chrismac1

Let me put this another way. I am an accountant. Suppose I asked you to pay me £500, but told you I would not be sending you an invoice or indeed any sort of paperwork. Would you pay me?

If they want your money they need to issue you with an invoice, contract or receipt of some kind. End of story.

Voyager2002

Empress3 wrote: »

I am in my first year of being self employed but I work within an established business. I pay 50% (a very large sum) of my earnings into this business as a rent for my room, overheads for the property, insurance etc. I have been told not say that I pay anything to that business & that I am simply working from home, I can only assume that this is because they do not declare that they receive this money. Should I be able to declare this money? Would I get a tax rebate on this money? Is this effecting my actual registered income? I feel like Im the one losing out here!

The situation you describe is so irregular that I advise you to check that the "established business" is not an invention set up to defraud you. One frequent scam is to 'employ' people to process payments: they receive money into their account and send on a portion of it, the remainder being the fee for their trouble. Of course, the in-coming payment turns out to be defective and the money they have forwarded is lost to them... If your new job is something like this, then be very careful.

notanewuser

I'm having d!jà vu........

Empress3

Its definitely not a scam, I actually am in the premises with the business owner & physically pay the money, I should add that the 50% differs on how much money I make as this can be greater or less some weeks.

patanne

This sounds highly irregular and also very expensive for you. Once you have earned enough to pay tax every £200 of your hard earned money is going to mean you will actually have - (VERY rough figures)

Earn £200 & pay £100 in rent (undeclared)
Pay tax on all £200 @ 20% = £40
Pay NI on all £200 (a guess) = £20

Leaving you with the grand sum of £40

Taking the rent into consideration
Pay tax on £100 = £20
Pay NI on £100 = £10

Leaving you with £70

I stress that these are very rough figures but should give you a picture of the impact of going along with this. Also if you ever need things like child tax credits it would be the £200 you would have to declare & not the £100. You need to look into this very carefully.

ETA are you sure you are insured as if there is no paperwork (I assume) then you do not exist on the premises. Is this something like renting a chair in a hairdressers?

Empress3

Yeah its exactly like renting a chair in a hairdressers, but my weekly amount can range from 400 pounds to 900 pounds there is no set rent amount, also no invoice.

BJV

No matter if there is a set amount or not you should get an invoice.

Sounds to me like the company you pay is doing something very strange!

BJV

Cash transactions are very difficult to trace so HMRC always want to see an audit trail so that they can access where the money came from and who it went to. They also want to make sure that you are not under or over paying tax's.

MMMM sounds fishy get an invoice!

patanne

It may make a difference if they take the money & give you back half, rather than you take the money and hand over half. I think that I would recommend a short visit to an accountant to discuss all the implications, as, whichever way this is done you need to be sure that HMRC is not going to have an issue with it.

Not a very MSE answer but it could save you a lot!

John_Pierpoint

Have you actually checked who owns the building in which you [STRIKE]rent space[/STRIKE].have a licence.
It might be the bosses granny or wife or........some other relative under the radar.