Accounting for job help as an expense?

Mr._Bigglesworth

Hi

I currently work full time and do a lot of mystery shopping/field marketing work on the side. After years of being a reliable worker for some of these companies, work really picked up during 2018/19 beyond my capacity. Rather than turn work down, i would take it on and let my fiancee do some of the assignments which she then took the payment as her own spending money when paid. I'm in a similar situation this year.

I was just looking at finances and preparing for the 18/19 tax return but then thought to myself that as my fiancee took on work from me and took the payment etc, that we should get her setup to do a self assessment tax return too.

So i'd count payment to her as an expense and she'd report the income on her tax return. Does that sound right?

I hope so, it would certainly help as accounting for that income would be in the higher tax bracket for me whereas if it is recorded in her self assessment it would be within the lower tax bracket.

Any thoughts on this would be great

unforeseen

Aren't you using her as an employee?

Mr._Bigglesworth

Is that what it would be classed as? There were some months that she didn't take on anything so i'd do the work. Much more of an ad-hoc basis

00ec25

Mr._Bigglesworth wrote: »

Is that what it would be classed as? There were some months that she didn't take on anything so i'd do the work. Much more of an ad-hoc basis

so what? she is not the one being paid by the company, you are. You have the contract, not her.

legally she is either a sub contractor or your employee:

to be a sub contractor, given she is your fiance, it would be rather muddy waters if you try to claim her payment as a cost against your income until her contractual status is clear .

get her to take the employee status test, just because her income is irregular does not define a non employee, ask anyone on a zero hours contract ...

https://www.gov.uk/guidance/check-employment-status-for-tax

silvercar

I would have thought that you show the income for the work and an identical amount as an expense, your fiancee then shows the same amount as income on her side.

Are the market research companies happy that you are out sourcing in this way? I would have thought they offer you assignments when you meet the demographic they are looking for and may not be delighted that you are then passing the work on.

Well done for declaring all the market research income. I'm sure many people don't.

Are you aware of the trading allowance?

Mr._Bigglesworth

That's what i thought too in terms of me reporting the income related to her as an expense and she reports the exact same amount as her income so it gets the correct tax treatment.

Yeah the company is happy with the arrangement so no problems there and i've got the type of relationship that they're happy for work to be done that way rather than finding others. They know what to expect when i send the work in.

I did wonder about how others treat the tax returns who do a similar type of work but no one would every admit to not submitting it!

No i didn't know about the trading allowance, thanks for the pointer

00ec25

silvercar wrote: »

I would have thought that you show the income for the work and an identical amount as an expense, your fiancee then shows the same amount as income on her side.

they will soon be husband and wife. they are already fiances - there are laws around income "shifting" to move money to the lower rate taxpayer whilst still keeping "in the family"

what you say is mechanistically correct, but you ignore the self employed subcontractor contract position at your peril