Employed, self-employed, or neither?
By way of background, my client had been employed in the media industry for many years, whilst at the same time conducting a spare time self-employment (translation and media services etc), generating a very small annual profit or occasionally a small loss. Last year he chose voluntary redundancy/early retirement from his employment, and has successfully expanded his self-employed activities, which can involve occasional assignments abroad, typically of one or two weeks duration.
His son has returned home after graduating from University and is now employed locally as a teacher.
In view of the vast increase in paperwork associated with his self-employment, the father (my client) enlisted his son’s help to assemble the paperwork for onward transmission to me for the preparation of the accounts. On and off, this project has taken several weeks to perform, and my client wishes to pay his son a fee for this work.
The son plays no active role in his father’s business throughout the year, and this project is seen as a “one-off”, though he may be similarly enlisted again in future years.
How would the son declare this one-off fee on his self assessment tax return? In very broad terms, I suppose that (a) the client could open a PAYE scheme and pay his son “wages” with a “BR” tax code, or (b) the son could register as self-employed (though he would only have one client – his father), or indeed (c) the son could join his father in partnership…
…but would it be sufficient simply for the son to declare his one-off fee in Box 16 on page TR3 of the tax return form (other UK income not included on supplementary pages)?
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