using casual labour

[jayw1966]

Hello Forum,

Hope somebody can help with this.

I make and fit furniture, wardrobes, kitchens etc. and sometimes pay a chap to help me. He insists on cash but can give reciepts. Over the year I could feasibly pay him over £2000.00. Is it ok to claim for this on self assessment?

Any help greatly appreciated

James

[ahathe60]

My understanding is that if someone is going to be using your tools and equipment etc then they have to go on the books. If he is using his own tools etc you can raise an invoice from him for yourself and attach his signed receipt to it.

[antonycc]

You may have to register with the CIS and pay tax a source for this guy. You can still pay cash but you'll have to give him a breakdown of tax taken from his pay. Have a look: http://www.hmrc.gov.uk/cis/contract-or-sub.htm

The CIS was introduced to help HMRC pick up tax without having to chase smaller cash based self employed people like your helper. If he is legal this won't make any difference to his take home as his own self assesment form will allow him to claim any overpayment back.

If the HMRC review your return they may question the payments to him and could ask for the tax from you.

For these sort of cash based casual workers, I also wory about insurance woo. Who picks up the bill when someone drills a water pipe? A formal relationship defining employees, contractors and sub-contractors makes it easy to see who's policy covers who.