He is self employed and mainly does work for one company, He charges the company his labour charge and recharges any expenses that he has had buy on the companies behalf. The expenses he pays out for are then reimbursed by the company on a weekly basis. The receipts match up exactly.
I have to do a self assessment tax return.
As these are not claimable expenses I presume that I will just ignore these when filling in the tax return? is this correct?
I dont have much practical experience but i thought i would share my opinion on this (if thats ok). My way of thinking is if these expenses are for him to do his trade, surely these are allowable expenses, so wouldnt it make sence to put the expenses down in expense accounts against his revenue, and reinburstments would be part of his revenue. (thats my way of thinkng any way, lol)
Rob So you would include these in your turnover and then deduct them in your own expenses? I understand that it would make no difference to the net profit, just wondered if you actually put in at all.
Yes you should put all income in, should our friends from hmrc take a look they will want to know what this income is and it does form part of the turnover so should be included. Again deduct as expenses so the profit is correct.
Hi Stuart, yes you were right in what you advised, I just wanted to clarify that it needed to be put on the top line too (for accounts and tax return).
