Intern payments

[TheCyclingProgrammer]

Sounds like the right thing if that's definitely the case. Just issue an invoice and keep a copy then?

Definitely keep records, just in case HMRC ever DO ask.

[LondonManc]

Maybe but there's also a risk they would insist on sending you a notice to file a return and then you've got to do it for however many years.

On the other hand, don't notify and as long as no tax is owed there is nothing HMRC can do. The mandatory £100 fine only applies for failing to submit a tax return that has been issued. The fine for failure to notify cannot exceed the tax owed so in this case nothing.

Sounds like the right thing if that's definitely the case. Just issue an invoice and keep a copy then?

[TheCyclingProgrammer]

Maybe but there's also a risk they would insist on sending you a notice to file a return and then you've got to do it for however many years.

On the other hand, don't notify and as long as no tax is owed there is nothing HMRC can do. The mandatory £100 fine only applies for failing to submit a tax return that has been issued. The fine for failure to notify cannot exceed the tax owed so in this case nothing.

[ASB]

Tcp,

Agree that the he guidance is not hacked up by statute. However statute may or kay not change.

Most practitioners (and I am not one) would usually suggest complying can lead to an easier life.

in my limited experience speaking to the help line and explaining the situation will now tend to lead to a "its ok" type of response.

At least it did in the 3 cases I am personally aware of.

[TheCyclingProgrammer]

Remember HMRC guidance does not match the reality of the legal position. Regardless of what HMRC say, you only have an obligation to notify them if you have income that is chargeable to tax.

There are numerous scenarios where HMRC say you need to submit a SA (eg if you're a company director) even if you have no taxable income. Doesn't mean your legally obliged to notify them or register for SA though.

If HMRC send you a formal notice to submit a tax return then you are legally obliged to submit it but I wouldnt register unless you legally had to, personally. Why give yourself unnecessary paperwork?

[ASB]

I assume that the bar work is on the payroll providing a pay slip and P60 etc and making the deductions for NI and TAX (I appreciate these are nil).

https://www.gov.uk/check-if-you-need-a-tax-return

"you got £2,500 or more in untaxed income, eg from renting out a property or savings and investments - contact the helpline if it was less than £2,500"

So, it appears they would like her to contact the helpline. [Obviously this is the guidance not necessarily the legal position].

The casual income is taxable - which is why HMRC want to know about it. However in this case it should cause a bill of precisely zero. The helpline will help. (I expect they will just ask for an assessment of her overall income for the year and then say "that's fine, but if it is more than 10k then you will need to pay tax on it")

[LondonManc]

Thank you all for the responses. She has a bar job that earns her £150-£250 a month (which she can't do during the two months she's on her internship). So by my reckoning, that'll earn her, assuming she works every Saturday for £100, £800 for the two months plus averaging £2000 for the other ten months. So, given approx £3000 over 12 months, she shouldn't need to declare anything from what I'm reading here. Is that the correct assumption?

[TheCyclingProgrammer]

It is is just an irregular casual thing then request a tax return and stuff it in other income is another alternative strategy.

This is what I'd do - although if the earnings are within her personal allowance (i.e. she has no other income), its not taxable anyway so she doesn't need to notify HMRC of anything. If she does have other income, then just stick it in "Other income" like you said.

[ASB]

It is so automatic my partner has had the hmrc debt collectors onto herdespite the on line form being filled in 3 times. 4 letters and 6 calls.

And 3 weeks ago they amended her tax code to collect the non existantdebt that way. Grr.

[Jessica@WhiteFieldTax]

Agree, it's tempting.

The Small Earnings Exception for Class II is now automatic (allegedly) as Class II has been migrated to being collected via Self Assessment,

[ASB]

If she is invoicing she will need to register as self employed.

Whether, on scrutiny, that would withstand status tests is another issue, but the liability rests with engaged not your daughter if there is a problem.

As always something in writing is a good idea, especially in case there is a status issue in the future and engaged tries to park it on her.

The problem with registering as self employed is that it will start generating bills for NI. Ok, the small business exemption can be applied for but it is a bit of a faff.

It is is just an irregular casual thing then request a tax return and stuff it in other income is another alternative strategy.

[Jessica@WhiteFieldTax]

If she is invoicing she will need to register as self employed.

Whether, on scrutiny, that would withstand status tests is another issue, but the liability rests with engaged not your daughter if there is a problem.

As always something in writing is a good idea, especially in case there is a status issue in the future and engaged tries to park it on her.

[LondonManc]

Thought I'd see if anyone has been in this situation before. My daughter is doing an internship during her summer break from uni. The internship itself is unpaid Monday to Friday. However, she's agreed to help them out and work weekends as required. She worked last Saturday and they've asked her to invoice them.

What should she do re tax, NI, etc?