I run a limited company, as just myself. One of my friends has been struggling for work and job has come my way that I could use his help with. I know that as a limited company I need to take an invoice from him, which I can then use in my tax records as an expense.
My question is does he need to worry about tax? The sum will be around £600, his other income from salaried jobs (when he has work) is all taxed before he gets it. Does that mean he falls below a certain threshold of taxable income? Do I need to pay his tax for him? Making him file as a limited company for a one off payment seems a bit over the top, but I don't know anything about being a sole trader.
I really have no idea! I'd like to help him out, but I don't want him to get him in any trouble with the tax man. And I can't do cash-in-hand as it will have to be on the books for my company. I hope this makes sense!
Thanks in advance for any advice!
My question is does he need to worry about tax? The sum will be around £600, his other income from salaried jobs (when he has work) is all taxed before he gets it. Does that mean he falls below a certain threshold of taxable income? Do I need to pay his tax for him? Making him file as a limited company for a one off payment seems a bit over the top, but I don't know anything about being a sole trader.
I really have no idea! I'd like to help him out, but I don't want him to get him in any trouble with the tax man. And I can't do cash-in-hand as it will have to be on the books for my company. I hope this makes sense!
Thanks in advance for any advice!