NI requirement

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Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Tue Jun 03, 14 10:01 pm Post subject:

onemanband wrote:

So presently son gets roof over head, laundry, food, beer, utilities and taxis. You're going to pay him to do nothing. Then charge him rent ?
Presumably only ï¿½4250 rent so that it comes within the rent-a-room tax relief ?
This is beginning to sound like an episode of Bread.

Hey, that's the system. What can I do?

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Tue Jun 03, 14 11:09 pm Post subject:

john of wessex wrote:

Um................

I suggest that HMRC may not look kindly

Genuinely, they can look unkindly, but can they do anything?

I have the income, the jobs he will do may be minor and infrequent, but I can pay whatever I want, to whoever I want, presumably, and as long as he pays any tax or NI that is required then is there anything wrong?

crofter

Joined: 11 Feb 2007
Posts: 2252

Posted: Wed Jun 04, 14 12:26 am Post subject:

Nick wrote:

john of wessex wrote:

Um................

I suggest that HMRC may not look kindly

As long as he really does some work, you should be OK. He can earn almost 10K before having to pay any tax, you will have to pay NI if he earns over 150/week, and you have to actually pay him!

Mistress Rose

Joined: 21 Jul 2011
Posts: 15967

Posted: Wed Jun 04, 14 6:27 am Post subject:

Another point is that if he is an employee you may well have to have employees insurance for him. You will have to keep the paperwork for that for something like 20 years as it covers long term problems as well as falling off a ladder.

There may well be some sort of insurance for this sort of thing as there must be something for people that for instance employ a carer themselves. Sorry not to be of more help, but our business is a limited company and the rules are different.

Behemoth

Joined: 01 Dec 2004
Posts: 19023
Location: Leeds

Posted: Wed Jun 04, 14 6:41 am Post subject:

Nick wrote:

Are you sure? The pay is only notional and you'd have to put up with an untidy bedroom populated by an Inbetweener.

There will have to be a money-go-round. I suspect somewhere there is a paragraph that will be your downfall.

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Wed Jun 04, 14 6:47 am Post subject:
I can happily pay him. That bits easy. Just means he will pay his school fees or car insurance himself. We have plenty of son based bills he can own.

onemanband

Joined: 26 Dec 2010
Posts: 1473
Location: NCA90

Posted: Wed Jun 04, 14 7:50 am Post subject:

If the work is infrequent, that sounds more like self-employment.
Far simpler on the paperwork side. All you will have to do is sign a cheque. All he has to do is write a quote/estimate and invoice/receipt.
Once he is registered self-employed he can legally do any work which would otherwise be classed as cash-in-hand(as long as he declares it). For low income, tax return is simple - basically just total income and total expenses to enter in tax return.

Shan

Joined: 13 Jan 2009
Posts: 9075
Location: South Wales

Posted: Wed Jun 04, 14 10:16 am Post subject:

Behemoth wrote:

Nick wrote:

Are you sure? The pay is only notional and you'd have to put up with an untidy bedroom populated by an Inbetweener.

There will have to be a money-go-round. I suspect somewhere there is a paragraph that will be your downfall.

If work is being done and paid for, why would there be a downfall?

Shan

Joined: 13 Jan 2009
Posts: 9075
Location: South Wales

Posted: Wed Jun 04, 14 10:21 am Post subject:

https://www.gov.uk/national-insurance/overview

You pay National Insurance contributions to qualify for certain benefits including the State Pension.

You pay National Insurance if youï¿½re:

16 or over
an employee earning above ï¿½153 a week
self employed and making a profit over ï¿½5,885 a year (unless you get an exception)
The exact amount you pay depends on:

how much you earn
whether youï¿½re employed or self-employed
You may also want to pay voluntary contributions to make up for gaps in your National Insurance record. For example, you can have a gap when you werenï¿½t working and didnï¿½t get any state benefits.

So, keep it below the level and he doesn't contribute NI or income tax. So no PAYE problems other than you will probably have to declare that he is below the threshold, although, I rather suspect this would be sorted out through his tax code.

Shan

Joined: 13 Jan 2009
Posts: 9075
Location: South Wales

Posted: Wed Jun 04, 14 10:22 am Post subject:

onemanband wrote:

If he only has one customer he is unlikely to be viewed as self-employed.

Rob R

Joined: 28 Oct 2004
Posts: 31902
Location: York

Posted: Wed Jun 04, 14 10:25 am Post subject:

Shan wrote:

Behemoth wrote:

Nick wrote:

Are you sure? The pay is only notional and you'd have to put up with an untidy bedroom populated by an Inbetweener.

There will have to be a money-go-round. I suspect somewhere there is a paragraph that will be your downfall.

If work is being done and paid for, why would there be a downfall?

The tax dodging vigilante's might get him. Or at least post a meme about it on facebook.

Shan

Joined: 13 Jan 2009
Posts: 9075
Location: South Wales

Posted: Wed Jun 04, 14 10:29 am Post subject:
That's their problem if they are too stupid to manage their taxation efficiently.

onemanband

Joined: 26 Dec 2010
Posts: 1473
Location: NCA90

Posted: Wed Jun 04, 14 7:28 pm Post subject:

Shan wrote:

If he only has one customer he is unlikely to be viewed as self-employed.

Yes that's true, but if he is starting out then he's not going to have lots of customers, nor need them if in education and living at home with no dependants.
I worked for several years self-employed for just one person. My colleagues worked elsewhere aswell, but I had a house full of lodgers and had no need to seek other work. I did meet other self-employed criteria tho.
I can't see how you can employ somebody(paying them weekly?) to maintain one house when the work is infrequent and unknown. If nothing breaks or tenants don't move then ï¿½5 or ï¿½6k is a lot for a bit of gardening.
It is debatable though and I'm not saying I'm right.
relevant link
and another (I think)

Shan

Joined: 13 Jan 2009
Posts: 9075
Location: South Wales

Posted: Wed Jun 04, 14 8:16 pm Post subject:
It's no different to having someone on retainer. We are not trying to split a nut here with an anvil here.

RichardW

Joined: 24 Aug 2006
Posts: 8443
Location: Llyn Peninsular North Wales

Posted: Wed Jun 04, 14 8:39 pm Post subject:
ï¿½6k a year is only about 5 hours per week at the rates most gardeners charge. I have had loads of jobs / contracts were they paid me incase they needed me. Most never did but were still happy to pay. Just like insurance.

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