My new client (a self employed milkman) maintains that his previous agent calculated (or estimated) his tips using an Inland Revenue approved rate.
I cannot find this anywhere. Nor can i find an adjustment on last years tax comp or within the nominal ledger. Is he milking the system?
stormrider
Replies (3)
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Hmm
I can't see there being an Inland Revenue approved rate for something which he should be recording.
Not taxable
I thought that the tips and perks milkmen got were, ahem, of a non-monetary nature. If so, no tax to pay.
Unless of course milkmen are now charging for that service too?
There might be a figure - if employed
I know that some years ago I came across a case of employed coach drivers having their PAYE coding notices reduced by an amount of assumed / deemed tips.
Maybe something similar applies to employed milkman.
But then, we have a self-employed milkman here so coding restriction is non-applicable (unless his business is in the format of a limited company).
Maybe the previous advisor was aware of some IR assumed / deemed tips level for employed milkmen's tips and has applied it to a self-employed person's tax computations ?
I think the correct position is as has already been stated, ie. as a self employed person the tips to him arising because of his trade should be recorded as business income.