Accounting Question

[Phidom]

Like many of us, work has been sporadic of late, although the last few weeks have not been too bad. I have mentioned this to a friend who runs a tree surgery business. He always seems quite busy and he has suggested I could do some casual labouring for him when my normal work dries up. It would obviously be best for him if I did this on a self employed basis and invoice him for such work. Is it acceptable for me to put this through the books of my appliance repair business or should I do an invoice in my own name and enter it separately in the tax return?

[clivejameson]

Re: Accounting Question

I would think you could simply put it through your books along with the rest unless you are using the fixed rate VAT accounting system in which case one might argue that the labouring should be accounted at a different VAT rate. If you are one man band then your labour services are simply that whether you are fixing appliances or fixing trees?

[Martin]

Re: Accounting Question

Oddly enough I called in my local tree surgeon a couple of months back to cut down and take away a 40 feet high Robinia Friscia that had died. 3 big blokes with ropes, chainsaws and a huge mulching machine cleared it in 20 minutes all for £35 which I thought wasn’t a bad price.

He insisted on being paid in cash of course so maybe your mate has a similar working practice. Cuts down on the paperwork and saves even more trees!!! 😉

[Phidom]

Re: Accounting Question

Thanks Clive. I’m not VAT registered so that’s not an issue. I bet you don’t do many jobs for £35, Martin 😆

[leavemetogetonwithit]

Re: Accounting Question

From a health and safety / insurance viewpoint I’d think it would be a bit dodgy undertaking work like that on a cash in hand basis.
Mike.

[Phidom]

Re: Accounting Question

Obviously my public liability cover would not apply to work like that but the tree surgeon business has the correct cover. I don’t know if their employee cover extends to casual labour though, so I could check on that. It’s not really cash in hand as I issue an invoice and receive a cheque. If you meant with Martins job, I suppose they decide after the work is completed whether they can get away with not putting it through the books. If the tree had fell on Martin or his van they would no doubt have made sure all the paperwork was in order in case of future court action etc!

[timdowning]

Re: Accounting Question

12 months ago I took over a ‘Step Aerobics’ business. I put the expenses through my business and pay in the monies taken at the door by writing out an invoice on a monthly basis. This invoice is exactly the same as my primary business.

Just for tidies, and the accountants, sake I keep separate spreadsheets for the ‘Step Aerobics’ side of things.

My accountant said this is fine.

[burns]

Re: Accounting Question

Hi
if I was in your situation I would continue to record your inputs and outputs for your current business and keep a record of all other earnings. Its unlikely you will occur any expenses (costs) with the second income.
At the end of the year let your accountant have all details of both income sources to work out your tax liability.

Try not to incur costs for the second job which are been met by the original business, its easier not too.

I wouldnt see the need for cross invoicing etc, but do keep good records and be prepared for the tax liability at the end of the year.
You can have as many income sources as you wish, just be able to show them clearly to your accountant and then its over to him or her.

[Author]

Posts