Sole Trader rules - I need help!!

pollyanna132

Hi everyone.

I need help!!

My husband has recently started working for himself as an event manager. This is mainly for one company who doesn't have employees but uses all freelance people. We invoice them after each job and it gets paid monthly. I understand that we will need to declare this as income etc and pay TAX and NI as a sole trader.

The issue I have (and I will be the one doing the paperwork!) is in regards to the extras.. such as expenses. I have tried to look online but it is a hard to pin point one answer.

Sometimes the events are overseas and so my husband has to spend a week or so away. The company pay for the flight and hotels up front. Occasionally he needs to take equipment with him so there is excess baggage...he pays this charge and the company reimburse straight away.
So first question is....as this is just a simple like for like transaction that is actually a company expense do we declare this transaction even took place?

The company also pay £20 per day per diems whilst on a job abroad... this is paid in advance and no receipts are required upon return. Sometimes this is good as he may not spend £20 per day but sometimes he spends more depending on which country he is in (the company pay a flat rate whether he is working in Barcelona or Abu Dhabi!).
So my second question is this....do we need to declare this anywhere? I understand expenses for food etc cannot be claimed back via HRMC but I am concerned that should they ever wish to check bank records there are also going to be these payments going into the account which we are not declaring anywhere?! Even if in fact he ends up spending more than he gets!

I hope this makes sense and I hope someone can help me find clarity!! ahhh!!

Thank you
Polly

ACG

Why not book an appointment an accountant?
For the sake of paying for an hour or 2s time (and can be put through the books), its worth getting professional advice. You may also find out a few other things that you put through you were not aware of.

Id imagine it would cost maybe £100-200 but over the years you could find you get that back 10 fold.

Tiddlywinks

You need to speak to a professional not trust the opinions of strangers on the internet.

These are not 'rules' but are legal obligations - you need to get the right advice to ensure you don't make an incorrect declaration.

You could also research courses / clubs which are there to help small businesses and look on the gov.uk website for pointers.

https://www.gov.uk/browse/business

Edwood_Woodwood

What the company pay for your husband is a matter for their tax return, not your husbands.

The flights, hotels, baggage are for the company's tax affairs as they are paying for them.

WHA

All monies paid by the client to your husband ARE part of his sales, so his gross earnings will be his time AND his recharged expenses.

His expenses are shown as his expenses, which may or may not be the same as the recharges. His client paying him £20 per day doesn't mean he can claim £20 as his expenses - there may be a profit or loss on his meals etc. which is taxable/tax offsettable.

If they're the same, they contra-out. But they still need to be included in the right places in the accounts/tax return, i.e. in sales/turnover and again in expenses/costs.

You can't ignore the amounts paid by the client unless they are paid directly to the service provider, i.e. they pay the air fares directly.

If he is VAT registered, he has to raise a VAT invoice and charge VAT on everything the client pays him, whether expenses or for time.