Accounting for my other-half

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
My Boyfriend has started up a small business. I've done most of the set-up - got him registered as self employed and taken care of the VAT registration for him and I plan to do his monthly book-keeping and prepare his tax return for him. He's a 40% tax payer so I thought that I should charge him for my services and reduce his profit therefore reducing his tax bill. (I'm a 22% tax payer). Do I have to register with the AAT or the inland revenue as self employed? (I don't wan't to be an employee of my boyfriends business I plan to just bill him for my time.) :?

thanks

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Accounting for my other-half

    Yes and Yes. You will need to register as a MIP and take out PI cover.

    Also you will need to register with HMRC as self-employed. :lol:

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Accounting for my other-half

    Thanks for your help - sorry to sound a bit dim but what is PI cover ?
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Accounting for my other-half

    Professional indemnity insurance - cover in case someone tries to sue you :shock:

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Accounting for my other-half

    Please also ensure that you have enough experience to make sure he gets his full allowances and benefits. Otherwise you could find what he's saving in accountancy fees, he's losing in his tax bill because there are more things allowable against tax than you are aware of.

    Annette
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Accounting for my other-half

    If it is just your boyfriend you are doing the work for the I wouldn't worry about registering as a MIP or getting PI... if you're offering your services to the general public then its a different matter, obviously.

    I also would agree with Annette.

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Accounting for my other-half

    Thanks Annette,

    I have thought that maybe my tax experience is a little limited. The tax units of AAT are a bit basic, but his profit is going to be VERY small this year so maybe if he takes on more customers next year we'll look into getting someone more experienced on board.

    Any tips on allowable expenses that may not have been covered by AAT ????-

    ps - i'm doing CIMA at the moment and wish that I had time to study ATT as I really quite enjoy tax! :D
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Accounting for my other-half

    Thanks to you too Dean....

    I read through the application process for MIP and I think I may be able to get away with not registering.

    I hope so anyway - all these fees are starting to add up!


  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Accounting for my other-half

    If you are claiming your fees against your boyfriends business then you, yourself should be declaring that income.

    Regards

    Dean

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