Paypal and small biz for brother abroad

Hi there,

Hope I've got the right board.

My husband's brother, who lives in Amman, Jordan, wants to start an online software business from his home.  He doesn't have a bank account in Jordan therefore my husband wonders if he can use his UK bank account to set up a paypal account for his brother, to receive any payments. 

However, husband isn't sure how this would work with HMRC.  Business hasn't started yet however I imagine any payments would be very small amounts coming into the account, but how would all this be viewed by HMRC?  Would hubby be liable to pay tax on any payments?  Would he have to declare this?  But how could he as he is not the one 'self-employed' - his brother is.  It's all too confusing for me.

Any advice gratefully received!  Thank you.
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Comments

  • Jeremy535897
    Jeremy535897 Posts: 10,427 Forumite
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    Presumably your husband would then send the money back to his brother? Your husband could be regarded as an agent for his brother, and be liable for tax in that way. Questions might also be asked about money laundering. It is hard to advise with so little information, but it sounds something to avoid.
  • Thanks for the response.  I don't have much info to provide.  Any money earned would be very little and yes, would be transferred back to my brother-in-law.  My brother-in-law's residency in Jordan doesn't allow him to work and he's finding it very difficult to provide for himself and his wife - relying on family support only.  He therefore wants to find a way to make a small living but can't have money going into his bank account as this might affect his residency.  They are in a very poor situation.
  • Jeremy535897
    Jeremy535897 Posts: 10,427 Forumite
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    It sounds very unfortunate, but there are the risks I mentioned.
  • Grumpy_chap
    Grumpy_chap Posts: 14,884 Forumite
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    Hi there,

    Hope I've got the right board.

    My husband's brother, who lives in Amman, Jordan, wants to start an online software business from his home.  He doesn't have a bank account in Jordan therefore my husband wonders if he can use his UK bank account to set up a paypal account for his brother, to receive any payments. 

    However, husband isn't sure how this would work with HMRC.  Business hasn't started yet however I imagine any payments would be very small amounts coming into the account, but how would all this be viewed by HMRC?  Would hubby be liable to pay tax on any payments?  Would he have to declare this?  But how could he as he is not the one 'self-employed' - his brother is.  It's all too confusing for me.

    Any advice gratefully received!  Thank you.
    Thanks for the response.  I don't have much info to provide.  Any money earned would be very little and yes, would be transferred back to my brother-in-law.  My brother-in-law's residency in Jordan doesn't allow him to work and he's finding it very difficult to provide for himself and his wife - relying on family support only.  He therefore wants to find a way to make a small living but can't have money going into his bank account as this might affect his residency.  They are in a very poor situation.
    This is a difficult position to be in.

    I don't really know about the tax situation but I'd be more worried about the BiL potentially operating outside his visa and whether your Husband is complicit in facilitating that.  If the BiL cannot work and cannot self-finance his lifestyle, would it be more appropriate to consider relocation to a place where work and being independently self-supporting is possible and sustainable for a long term future.

    What seems certain here is that the BiL will not be declaring earned income in Jordan and paying whatever the equivalents to income tax are there.  Presumably, the money transferred from your Husband will be recorded (in Jordan) as "gift from family"?

    Thinking that through, if the above is correct, then your Husband would have to show that the money is earned as his own self-employment, pay tax as appropriate and then "gift" BiL whatever is left over.  There are some obvious implications that may follow from this - not least if your husband and you are ever in need to claim benefits, the ongoing income from the BiL's work would impact your eligibility for UC etc.    I'm not sure about rules and legalities, but the whole approach just seems rather "messy". 

    If you decide to proceed, it would be worth getting proper professional advice to ensure everything is done "correctly" and your are not exposing yourselves (you, Husband, BiL) to any legal / criminal risk.  I'm not sure where you would get the appropriate advice as it is a rather "niche" question. 

    On the face of it, the question is "how can my Husband facilitate my BiL to earn an income circumventing his Visa conditions in Jordan?" Is that essentially what the situation is?  If so, I suspect no self-respecting professional with PI to consider will give you an answer that supports the proposal.

    Another way that this might be able to proceed, and not involve you and your Husband at all, would be if your BiL started a Ltd Co. to operate the business through and receive payments.  That can then be paid to the BiL's own UK bank as salary and dividends as appropriate and the BiL can transfer funds from his UK account to the account in Jordan.  If all the drawings are taken as dividend, the BiL may even be able to state that the funds have been transferred as income from his investment portfolio.  I don't know how deeply the authorities in Jordan would look if they thought he was working in contravention of the VISA.  This keeps everything clean and totally separate from you and your Husband - if there are any contraventions of the residency rules in Jordan, this is entirely down to your BiL and you have not in any way been aiding-and-abetting.

    I don't know about the actual rules and legal position on any of the above, nor what taxation would apply.  I have just written my thoughts as I worked through the questions asked.  It is complex and unusual and you could take professional advice.  Without that, this is certainly something I'd steer clear of any involvement.
  • Thank you.  I didn't know where to start with this except to put the question as it is and see where it would be guided.  Yes, it is not easy and I was at least aware that there might be complications.  I am grateful therefore for the responses so that my husband can advise his brother that this is a complex situation and he should consider other options.

    Unfortunately my brother-in-law is unable to relocate for many reasons, firstly he is an Iraqi and unless he were to apply for refugee status there are very few countries that would accept him and his wife, who incidentally, has a British passport but is unable to come to the UK because they simply would not be able to fulfil the financial requirements of the current spouse visa.  Secondly, they don't have funds or resources to relocate.  Thirdly, my brother is 54 and has not worked for many years due to caring for a severely disabled child, who sadly passed last year from Covid.  As I said, it's a very poor situation and my husband was just seeing if there was a way that he could support his brother.  
  • Grumpy_chap
    Grumpy_chap Posts: 14,884 Forumite
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    I am no expert, but the following gives guidance on the rules for Spousal-VISA to UK:
    https://www.citizensadvice.org.uk/immigration/getting-a-visa-for-your-partner-to-live-in-the-uk

    If I read that correctly, then SiL has British passport so I assume that means British Citizenship.  One way forward would be for her to relocate to UK and secure employment paying at least £18.6k.  Min wage from April £9.50 per hour, 40 hours per week, 45 weeks (paid) per year equals £17k, so it is not much more than min wage job she needs.  

    This would appear to then be sufficient to bring BiL to UK and he could do the same IT work remotely from UK as he could from Jordan.

    This is not an easy route and all the rules will need to be looked at carefully, especially if once in UK return to Jordan ceases to be an option.  Living in the UK on min wage won't be a bed of roses either, but plenty manage to do it.

    They have my sympathy for a difficult situation.
  • Sandtree
    Sandtree Posts: 10,628 Forumite
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    Thanks for the response.  I don't have much info to provide.  Any money earned would be very little and yes, would be transferred back to my brother-in-law.  My brother-in-law's residency in Jordan doesn't allow him to work and he's finding it very difficult to provide for himself and his wife - relying on family support only.  He therefore wants to find a way to make a small living but can't have money going into his bank account as this might affect his residency.  They are in a very poor situation.
    But you stated he didnt have a bank account previously?

    It'd also raise the question of why he is in Jordan if he is the main provider but is living there under a non-working visa but thats probably not relevant for this thread. 

    There are a series of risks that you and he would be running so you need to think carefully if its worth getting involved in him trying to stay illegally in the country. As well as tax, money laundering etc you also have to consider if his customers start getting their money back from PayPal disputes after you've already forwarded the funds to him
  • Sandtree said:
    Thanks for the response.  I don't have much info to provide.  Any money earned would be very little and yes, would be transferred back to my brother-in-law.  My brother-in-law's residency in Jordan doesn't allow him to work and he's finding it very difficult to provide for himself and his wife - relying on family support only.  He therefore wants to find a way to make a small living but can't have money going into his bank account as this might affect his residency.  They are in a very poor situation.
    But you stated he didnt have a bank account previously?

    It'd also raise the question of why he is in Jordan if he is the main provider but is living there under a non-working visa but thats probably not relevant for this thread. 

    There are a series of risks that you and he would be running so you need to think carefully if its worth getting involved in him trying to stay illegally in the country. As well as tax, money laundering etc you also have to consider if his customers start getting their money back from PayPal disputes after you've already forwarded the funds to him

    "His bank account'  - oh, that's an error, I didn't mean that.  And no, this is not the right thread for my brother-in-law's situation, except suffice to say that you must be aware of the Iraqi diaspora... many Iraqis had to leave their home country.  My husband's family is all over the world, either settled with refugee status or work/study visas.. it's been very tough for them all.  Jordan is one country that 'accepts' Iraqis hence my BIL and wife moved there and for years they have together had to look after their severely disabled child.  

    I'm not quite sure where you got the 'stay illegally in the country' from.. he's perfectly legal in Jordan under his current visa, and has been for many years!!
  • I am no expert, but the following gives guidance on the rules for Spousal-VISA to UK:
    https://www.citizensadvice.org.uk/immigration/getting-a-visa-for-your-partner-to-live-in-the-uk

    If I read that correctly, then SiL has British passport so I assume that means British Citizenship.  One way forward would be for her to relocate to UK and secure employment paying at least £18.6k.  Min wage from April £9.50 per hour, 40 hours per week, 45 weeks (paid) per year equals £17k, so it is not much more than min wage job she needs.  

    This would appear to then be sufficient to bring BiL to UK and he could do the same IT work remotely from UK as he could from Jordan.

    This is not an easy route and all the rules will need to be looked at carefully, especially if once in UK return to Jordan ceases to be an option.  Living in the UK on min wage won't be a bed of roses either, but plenty manage to do it.

    They have my sympathy for a difficult situation.
    Thank you for this.  We had tried to help them with the spouse visa route several years ago but it was a complex and difficult situation especially with the 24 hour care of their daughter.  Now, my sister-in-law is in her 50s, and hasn't worked for almost 20 years, and with very little experience, it would be difficult for her to secure employment here.  Obviously it's all straightforward on paper but without knowing the people and their situations personally, difficult to tell them to just do it.  My husband would love to have his brother here but we are realistic that it's probably not an option.   
  • Just to say, thanks everyone for your responses.  My husband has relayed the advice to his brother and the matter is now closed. 
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