working with another freelancer

[g5604]

Hi,

I am working with another freelancer on a site that sells software. Its a 60/40 split and at the end of each month i get the money we earn and send him his share. Now, how do i square this with the tax man? is his share an expense? or does he need to be my employee? sorry i am clueless.

thanks,
g

[DodgyAgent]

Hi,

I am working with another freelancer on a site that sales software. Its a 60/40 split and at the end of each month i get the money we earn and send him his share. Now, how do i square this with the tax man? it his share an expense? or does he need to be my employee? sorry i am clueless.

thanks,
g

If the software is a new version of spellchecker, I doubt that you will receive any interest from HMRC?

[Bluebird]

Hi,

I am working with another freelancer on a site that sells software. Its a 60/40 split and at the end of each month i get the money we earn and send him his share. Now, how do i square this with the tax man? is his share an expense? or does he need to be my employee? sorry i am clueless.

thanks,
g

is he self employed ?
does he want to be an employee ?
do you want to treak him as an employee ?

There is no straightfoward answer - it's up to you how you want to play it - however which ever way you go YOU need to ensure yours and his paperwork and contract etc are in place.

[g5604]

he has a fulltime job and fills out a self assessment form.

i don`t treat him like a employee - its a collaboration. Just worried about paying tax on his share..

[ratewhore]

I'm not sure the revenue like payment to private individuals anymore, even receipted. You may find they want you to take him on.

This is based on a conversation with a friend of mine who runs a non-IT related small business. He has a PAYE investigation and was told not to take cash-in-hand people on anymore, they had to go on the books even if it was just for one day (which sometimes it was as he runs a removals business).

[pmeswani]

he has a fulltime job and fills out a self assessment form.

i don`t treat him like a employee - its a collaboration. Just worried about paying tax on his share..

Tell him to give you an invoice (made out to Accounts Payable) and you pay the invoice by cheque or whatever method suits you, and let your freelancer friend declare the earnings in his self assessment and pay the tax accordingly.

[voodooflux]

Tell him to give you an invoice (made out to Accounts Payable) and you pay the invoice by cheque or whatever method suits you, and let your freelancer friend declare the earnings in his self assessment and pay the tax accordingly.

WHS

[VectraMan]

If you think it's a long term thing, why not create a new Ltd. company between you for this? You can split the share 60/40 or whatever. That's what I have for plan B co.

[g5604]

thanks guys, .. as this is going to be regular thing for quite a large sum of money, will that be ok with the tax man?

[g5604]

VectraMan, sounds a bit scary what are the advantages?