Paying tax on Mystery Shopping

Scrooge60

If you receive a fee for doing a job plus an amount for reimbursement, would both amounts be subject to tax?
The reimbursement is paid for the purchase of food to do the job so would that be counted as expenses and also travelling to the place?

vegasvisitor

I believe this believes how much you are talking. And also who you ask unfortunately.

This is my take on it, a few scenarios:-

If you do a MF bakery, you get a fee and a reimbursement. They're necessary purchases. You're doing it locally, small fee, pay tax. But if your mileage and printing wipe out the fee it looks funny, so you then must have done it for the freebie.

If you do a React supermarket cafe, you get a fee but will have some expenses. I usually spend up to half of the total. So it's fee, minus purchase (which should be minimum purchase), less printing and mileage. Pay tax on balance. If balance is less than zero you shouldn't have taken the job.

I also do some that give me a reimbursement only. They're for smelly toiletries. I have to put these through as full amount as there's no fee. So it's full amount (even though it's a required purchase), less mileage, less printing etc. Then I pay a bit of tax on it but I've done it for the freebie.

Restaurants. I do some restaurants sometimes with no fee. They tend to be out of town though, so although I have to use the reimbursement as a starting figure, less mileage and less printing, by the time I do that I'm maybe only going to pay about £5 in tax, which is worth it to me (ie I know I did it for a free meal and I'm prepared to pay tax even though there's no fee).

Hotels, I don't quite understand. If you visit a 5* hotel, your tax bill could be £50, but I'm sure that there should be some element of it that isn't taxable. After all, when I did a 5* one, I could hardly relax - I was checking things for hours really! My hotels are mainly April this year onwards though, so I haven't had to do a tax return for those yet so I can work that out later!

Will be interesting to see if anyone else has any input on your question.

gallygirl

Don't do it now but I used the rule of thumb that if I had to report on the purchase it wasn't taxable. E.g. buy a coffee - was it hot, did it taste good? I had to buy the coffee, it wasn't my choice so part of a work related expense. If however it was a BP shop with a simple £5 purchase on anything where you were reporting on the service, not the goods, then I declared it as a taxable benefit.

I did take jobs that led to a loss because of that - usually because I wanted in the company's good books to get phoned and offered prime work, or I was going there anyway.

When I stayed in a hotel I didn't declare the fee as it was a requirement of the job to stay in that hotel in that category room and eat dinner at certain hours etc. And I agree - flipping hard work!!!!!

System

Fee + reimbursement declared for tax purposes as income.
Cost of purchasing goods + mileage declared as an expense/outgoing.

People may dress it up, or have reasons to explain it away, but ultimately you should be declaring ANY money that you receive to the tax man that isn't from a non-taxable source (such as gambling winnings).

I work from home, full-time, and I declare everything, including vouchers and freebies that I'm sent for review and then sell. I don't take any risks with the taxman but reading MSE sometimes I'm not surprised to see that people have a different opinion. I use an accountant too to get advice on such subjects, as my husband works in a job where I can't afford ANY trouble with the taxman. If it wasn't for that maybe I'd play a little fast and loose with the rules as a lot of areas are 'grey' and even HMRC themselves don't know when you ring and ask a question about if something is declarable sometimes

vegasvisitor

I was keen to see other people's replies. Gallygirl, I'm sort of seeing what you mean about specific and non-specific items, but hadn't really thought about it mattering. I mean they're still asking you to buy £x worth of stuff, regardless of whether it's a set item or just items from that store. When I say this I'm thinking of freezer shops on MF, which have a fee too, if that makes sense. When I do smelly toiletries I know I'm doing the job for the smelly toiletries as there's no fee, so I don't count it as an expense.

Katykicker - I just want to clarify, I don't mean I don't declare any of it. Just that I do/don't deduct it as an expense. So my income would be anything that comes into my bank from MS companies. My expenditure would be the things I feel I had to buy, and my general expenses. So I had to buy a sausage roll, or I had to buy a 3 items in the supermarket.

Out of curiosity, what do you think of a meal scenario. If I got a single figure fee for a meal, and a 2 course and wine reimbursement (ten times the fee say). I would declare the total they pay me, but I would only deduct mileage and printing. Would you declare the meal as an expense and deduct it and therefore just pay tax on the fee? Would be nice if it was correct, but I would have a negative amount if I then deducted mileage or even just a train fare.

It's nice to be able to discuss this - I do wish that HMRC gave us rules though...as it's so confusing and I can understand everyone's point of view even though it's different!