I do my husbands bookkeeping for his business but I do not physically get paid. I do it free of charge because if he paid me, I'd have to be registered as self employed with HMRC and basically it's just shifting income between us.
Could we still claim a nominal amount, say £200, against his P&L for the work I've done (i.e. my time spent doing his bookkeeping) ?? If acceptable, I was thinking the relevant accounting entries would be DR Accounting/Professional fees and CR his Drawings account??
Thanks, I was thinking along the same lines. To put it through the accounts it would have to be tax deductible expenditure and like you say, it's effectively income for somebody else (i.e me) which needs to be taxed.
So won't be putting through the expense unless I can get my husband to formally pay me and I then declare earnings to HMRC.
I do the books for my fiancee, started doing it in my spare time around my full time job elsewhere and now do it fulltime. I can not advise on how it might affect you taxation/tax credit-wise etc. However If you do have to start doing a payroll for yourself (like I had too in order to take some pay for my book-keeping services) I would highly recommend 12Pay. I was a complete novice and discovering this for Payroll processing was a god-send! Its a database with all the rates etc built in and you just add your details inc tax and NI codes and your pay each week/month. You can print monthly payslips and it compiles all your figures for month and year end. Then you can use it to send it to HMRC electronically (once you have registered for online services)
It is really cheap for a years licence and you can download it straight away. I contacted a local experienced book-keeper and she agreed to spend 1 hour for £20 showing me how to do payroll manually, this was such a great help as it helped me understand the workings and thats when I discovered 12Pay. (12Pay is one of the HMRC accredited software packages as per HMRC website) The hour I spent with that other BKeeper helped me understand how the Payroll software worked when I discovered it.
Hope this helps, I appreciate you may alreay be fully conversant with payroll, if so just ignore me!
