Paying a friend for work

[northernladuk]

I can hear people gnashing their teeth ready to flame on at my title but hopefully I will have made an attempt to cover the noob part of the question. Just want to make sure I got the whole picture.

I need to courier some work in short timescales up and down the country. Just a few trips nothing long term. I have an out of work friend with a bike. The price to courier it down is not cheap so would like to keep the costs down and help my friend.

My friend does a couple of trips, I invoice the client for the work and get the cash in the next period. I take off company tax, vat (FRS) etc and work out how much is profit to me and include this in my next dividend payment. I then pay may mate cash and get his assurance he will put this earned income through the correct channels

Does that sound about right?

As my friend has no company etc I am paying him out of my pocket. Is there any other option open to me without incurring extra work/accounting etc and is there anything allowing a company to make the odd low value cash payment (petty cash etc)

P.S. I am not gonna bend over backwards for him. If its easy to do I will but I aint out to line his or my pockets while putting myself at risk.

Flame on!!!

[TheFaQQer]

I wouldn't pay him out of your own pocket.

Get him to give you a receipt - just has to have the details, e.g. "Received £x from Y Ltd for courier work" and the date. Then pay him out of company account.

That keeps your paperwork straight, and it's up to him to pay the tax on it.

IANAA.

[northernladuk]

Get him to give you a receipt - just has to have the details, e.g. "Received £x from Y Ltd for courier work" and the date. Then pay him out of company account.

But he isn't a LTD. Am I missing a subtle hint here to just put that and forget about it or shum mishtake?

[TheFaQQer]

But he isn't a LTD. Am I missing a subtle hint here to just put that and forget about it or shum mishtake?

No - you are Limited, though, I assume?

He puts on the receipt that he received money from your company for doing the work. Doesn't matter whether he is limited or not - my first contracting gig was when I was a student and I just sent a bill to ICI and they sent me a cheque.

[TykeMerc]

But he isn't a LTD. Am I missing a subtle hint here to just put that and forget about it or shum mishtake?

You're (please note the spelling) missing something something rather obvious...

Simply because we have to trade as Ltd companies because of our dealing with agencies suppliers to YourCo Ltd do not have to be Ltd, they can be sole traders.

So long as your mate invoices YourCo appropriately and you've had the sense to put a little contract together stating that he will be responsible for his own tax liabilities, you pay him from the company and it's a valid business to business expense.

[northernladuk]

Great, that makes sense thanks...

You're (please note the spelling) missing something something rather obvious...

Simply because we have to trade as Ltd companies because of our dealing with agencies suppliers to YourCo Ltd do not have to be Ltd, they can be sole traders.

So long as your mate invoices YourCo appropriately and you've had the sense to put a little contract together stating that he will be responsible for his own tax liabilities, you pay him from the company and it's a valid business to business expense.

That was done on purpose right?

[TykeMerc]

Yes I used the words correctly, in many of your posts you don't, I find that very hard to read...

You're = You are
Your = of you / belongs to you

They aren't interchangable as they have completely different meanings.

I hope that what I posted as a solution to using your mate to provide a service made sense.

[northernladuk]

Certainly did thank you

[BolshieBastard]

I can hear people gnashing their teeth ready to flame on at my title but hopefully I will have made an attempt to cover the noob part of the question. Just want to make sure I got the whole picture.

I need to courier some work in short timescales up and down the country. Just a few trips nothing long term. I have an out of work friend with a bike. The price to courier it down is not cheap so would like to keep the costs down and help my friend.

My friend does a couple of trips, I invoice the client for the work and get the cash in the next period. I take off company tax, vat (FRS) etc and work out how much is profit to me and include this in my next dividend payment. I then pay may mate cash and get his assurance he will put this earned income through the correct channels

Does that sound about right?

As my friend has no company etc I am paying him out of my pocket. Is there any other option open to me without incurring extra work/accounting etc and is there anything allowing a company to make the odd low value cash payment (petty cash etc)

P.S. I am not gonna bend over backwards for him. If its easy to do I will but I aint out to line his or my pockets while putting myself at risk.

Flame on!!!

Your mate has no co so will have no business insurance. If he kops for an accident while on business for you, who's going to pay up? Or will you say its his problem?

Not a good move imo.

[jmo21]

That was done on purpose right?

that was a superb FAIL mate!