Mystery Shopping Tax on Items Bought

swwchris

Firstly apologies for another thread on mystery shopping and tax. I have searched and searched and cannot find an answer to my question!
I do mystery shopping and get reimbursed for the items I purchase (which I get to keep) plus a small payment per review
I know for sure that I have to declare the payment for my time reviewing but how do I deal with the reimbursement for the items purchased? Again I keep these items to do what I want with them.
The amount of money can be between £2500 and £5000 per year
Do I declare the reimbursement as income and then enter it as an expense?
Or do I declare the reimbursement as income and just pay tax on it because I get to keep the items?
I am hoping there is a straightforward answer (but suspect there might not be)
Thanks all

Jeremy535897

Your profit is the amount you are paid for reviews, plus the market value of the goods you are allowed to keep. It is probably best to include the review payments, the reimbursements, and the value of the goods kept, in turnover, and include the amount you spent on the goods in expenses. The end result is that you pay tax on the payments for reviews and the second hand value of the goods, assuming it is a trade.

swwchris

Thank you for the quick reply which is greatly appreciated, can I please give you a scenario to check I understand properly
1. I make a purchase of an item which costs £50
2. I get paid £10 for doing the review plus I keep the item purchased
3. So in total I get £60
In my tax accounts/self assessment I show the following
Income for review £10
Income Reimbursement for purchase - £50
Income Value of goods purchased (not sure how to badge this line?) - £25 (the general advice seems to be 50% of purchase price)
Expenditure - £50
So profit will sit at £35 which because I am also employed and use my tax allowance I will pay 20% tax on

I presume I don't show all the calculations in my self assessment but how do I show the value of goods purchased in my accounts? I am also unsure of how I write these items off because they will either used by myself or given to family and friends, or do I not have to worry about that?
Thanks again for any help you can give

Jeremy535897

I suggest you record the £50, £10 and £25 so £85 in turnover (box 9 SA103S). Record the £50 in expenses in Box 20 (as you will have turnover under £85,000, you don't need any more detail). Any other costs like working from home, mileage etc can be added to it. Goods you keep or give away are drawings of profit so don't count. If you sell them, add the proceeds to turnover, but delete the £25 market value from turnover as the proceeds replace the market value.

swwchris

Excellent thank you so much
Have a good year