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Use of £1000 allowance - income from wife/husband

With the £1000 trading allowance, is it possible for someone to invoice the partner for bookkeeping

Fairly simple question hopefully! With the £1000 trading allowance, is it possible to invoice a husband/wife/partner etc for ‘bookkeeping’ services for the year so that they receive further tax relief, without impacting your own position?

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08th Mar 2019 10:34

What is "own position"?
I ask this question because HMRC guidance says

You can’t use the allowances in a tax year, if you have any trade or property income from:
a company you or someone connected to you owns or controls
a partnership where you or someone connected to you are partners
your employer or the employer of your spouse or civil partner

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to lesley.barnes
08th Mar 2019 12:31

Read it 3 or 4 times and presumably meaning the person invoiced gets and extra £1k deduction for the bookkeeping cost but the 'bookkeeper' - who presumably has other income using their PA's already - has no additional liability because of the trading allowance they can claim.

And I suppose the answer is 'possibly', but you would want to be able to clearly show transfer of funds settling the invoice and the the work was carried out, not just a paper transaction solely to get an additional deduction.

EDIT: Or possibly not -

ITTOIA
783AP Exclusion from relief: payments by firm
No relief under this Chapter is given to an individual for a tax year if—
(a) the individual has relevant income for the tax year, and
(b) the income includes a payment made by, or on behalf of, a firm at a time when the individual is—
(i) ..., or
(ii) connected with a partner in the firm.

And indeed:
783 AO Exclusion from relief: payments by employer ; or
783AQ Exclusion from relief: payments by close company

Though I can't immediately see the definition of 'firm' that restricts that to a partnership but not a sole trader?

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to Paul D Utherone
08th Mar 2019 16:17

It doesn't matter what the definition of firm is, it's the definition of partner that's relevant.

The proprietor of a sole trade is not a partner, so the individual is not connected to a partner, regardless of how you define 'firm'.

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to Paul D Utherone
08th Mar 2019 16:25

I'm not reading "partner" as "partner in a firm".

But I'm open to clarifications.

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to lionofludesch
08th Mar 2019 17:40

The words in s783AP are "partner in the firm".

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to Tax Dragon
08th Mar 2019 17:42

Quite - but I meant in the OP.

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to lionofludesch
08th Mar 2019 17:50

Ah, hence my query... it hadn't occurred to me (until now) that anyone had read it that way.

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to Tax Dragon
08th Mar 2019 18:08

To avoid confusion, perhaps we should stick to the term "bidie-in" for a domestic partner.

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08th Mar 2019 09:14

What is 'bookkeeping'? Do you mean bookkeeping or making stuff up?

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to Rammstein1
08th Mar 2019 10:47

I work full time employed and so have no sole trade income.

I actually do assist with the bookkeeping of my self employed other half, who doesn’t have much knowledge of bookkeeping/accounting. So in all honesty I do spend roughly an hour a month correcting mess ups!

So £20-£25 a month in theory

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to TomH1996
08th Mar 2019 12:22

Have you actually been paid these amounts, or is it just a theoretical assessment of what you are worth.

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08th Mar 2019 09:45

Does this husband/wife/partner actually do any bookkeeping ?

I note 'bookkeeping' is in inverted commas. Will the inverted commas be entered on the h/w/p's tax return under "nature of trade or profession" ?

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08th Mar 2019 09:57

It's not always as straightforward as it might appear...https://www.accountancyage.com/2017/10/09/new-trading-allowance-simplici...

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