SB: Paying for a bit of help

honeypop

Wasn't sure how to explain this in the title...

My parents have just taken over a little village shop and need a little help with setting up a few systems, they know someone who has helped them in the past with similar things on other business ventures and wish to get this person to help them out in return for payment (for ease of explanation I will call him Bob).

So, they want to pay Bob for his time and travel, and pay for it from the books of the shop, as they see it as a business expense and he would be working all weekend on it.

Bob doesn’t do this sort of thing as his job, he will be doing it in his own time and get say £100 for it. I assume he can’t issue an invoice if he’s not actually self-employed.

My question is: how do both parties go about this?

What do my parents do to record it in the books as money paid out without an invoice?
What should Bob do in order to be able to accept the money? Does he need to register as self-employed just for this? It seems a bit pointless for a one-off occasion but if that’s what he has to do then he will (or more likely they will pay him out of their pocket I guess). Can someone just invoice for their time and expenses in this situation?

My parents just want to be sure they are doing it all the correct way.

scbk

TBH since it's just a one off £100 I'd give Bob the cash and say no more about it :whistle: :shhh:

Savvy_Sue

I would also say that this is Bob's problem, because they're not expecting him in on a regular basis, they're not retaining his services, and he's free to either do the work or not as he feels inclined. And presumably if he didn't want to do it he could say to your parents "Not free but my mates Bill and Ben will come and do it instead if you like."

So, Bob should be declaring it on his tax return. Whether for a one-off he does need to register as self-employed I'm not sure, if it really IS a one-off, but if it's something he does a few times a year then definitely he should.

What your parents could do is mock up an invoice, or ask Bob to sign a receipt 'for services rendered'. That way they've got something to show the accountant.

MORPH3US

Bob should be able to do an invoice for you, he doesn't have to be a limited company, partnerships and sole traders can issue invoices and they are really simple to do.