Using a family member to help reduce tax bill.

NannaH

Can I suggest,  if you don’t use accounting software,  it’s really worth it.
I use freeagent,  it’s free if you have a Mettle business account or about £20 a month if not.
Really simple to use, can take photos of receipts and upload them to match bank feeds,  create customer invoices which you then match to bank payments.
It fills in your info ready for self assessment automatically as you go along.  

Something for your Son to do 😉  

[Deleted User]

13 year old children can only work a maximum of twelve hours per week!

NannaH

That’s why I advised 10 hours at £12 an hour. 

Fits perfectly under the registration threshold. 

p00hsticks

purdyoaten2 said:

13 year old children can only work a maximum of twelve hours per week!

But is there really more than twelve hours worth of paperwork to do every week for a one-man sole trader ?
I think HMRC will take a dim view of the OP paying for twelve hours worth of work if realistically the amount of work involved should only be taking a couple of hours a week....

sheramber

Does your son have 2 hours free every night to do your paperwork and does he want to spend 2 hours a night doing it.

Does he not have homework, studying, hobbies, friends to meet up with or text?

You can't just deduct wages on paper to save paying tax.  he ha to do the work.

NannaH

It depends in what OP actually does, if he’s a Tradesman it can stack up. 
I do a minimum of an hour every day.
I create customer invoices  - DH is a Gas safe / heating engineer so they pay him onsite and I send them a receipt or if it’s a landlord with a ltd. Co , they generally want invoicing before they pay. 
I take pictures of and upload the receipts for parts etc. to the accounting software,  I prepare quotes for enquiries.   I have to verify everything in and out of his business account via the accounting software. 

 I’m ready for MTD even if Hmrc aren’t 🤣

NannaH

Plus,  HMRC won’t actually know ( unless they decide to ask) that he pays anyone at all if it’s just lumped together under ‘expenses’  - Box 20 on the short form is all you need fill in if turnover is under £85k .
You can choose to fill in the individual boxes for different expenses but you don’t have to .

I imagine them taking an interest if expenses suddenly double without the corresponding rise in turnover but for £6k I doubt they’d care.  In DH’s case it would be 4 or 5 boilers costing £6k for an extra £9k in turnover. 

Grumpy_chap

evosy1978 said:

Sorry. Its my 13 year old son. I would pay him below tx and ni threshold. I was under the impression he can do 2 hours an evening.  Legally. It would be paperwork. 

 I'm thinking of doing this with the sole intention of saving me money on paying the high tax rate as I will earn more than that this year .  I do my own tax returns online.

Thanks

You can't do this solely to save your money on the higher rate tax threshold.
You actually need to pay the money to your son who actually needs to do the work.
It cannot be just a paper exercise to record an expense that is fictitious.
Having been paid the money, your son can do as he wishes with it whether it is something you approve of or not.

sheramber

NannaH said:

It depends in what OP actually does, if he’s a Tradesman it can stack up. 
I do a minimum of an hour every day.
I create customer invoices  - DH is a Gas safe / heating engineer so they pay him onsite and I send them a receipt or if it’s a landlord with a ltd. Co , they generally want invoicing before they pay. 
I take pictures of and upload the receipts for parts etc. to the accounting software,  I prepare quotes for enquiries.   I have to verify everything in and out of his business account via the accounting software. 

 I’m ready for MTD even if Hmrc aren’t 🤣

Some cases are selected by computer algorithms,for investigation,  some are random selections. The luck of the draw.

[Deleted User]

sheramber said:

NannaH said:

It depends in what OP actually does, if he’s a Tradesman it can stack up. 
I do a minimum of an hour every day.
I create customer invoices  - DH is a Gas safe / heating engineer so they pay him onsite and I send them a receipt or if it’s a landlord with a ltd. Co , they generally want invoicing before they pay. 
I take pictures of and upload the receipts for parts etc. to the accounting software,  I prepare quotes for enquiries.   I have to verify everything in and out of his business account via the accounting software. 

 I’m ready for MTD even if Hmrc aren’t 🤣

Some cases are selected by computer algorithms,for investigation,  some are random selections. The luck of the draw.

Yes - to a certain extent. When I was there - a certain percentage at random.  Some which used to create ‘triggers’ (general expenses increasing from 800 to 8000, for example). Some claiming 20000 wages when no PAYE scheme on operation etc