Q: Do I need to keep details of the subcontractors I use to avoid paying tax on their cost?
Jun 08 2009
Answered by: Marc Barber Ask a question
You should keep full records of who you have paid, for how much and what they have done. Even if they are subcontractors who are paid cash, you need to make sure you get an invoice from them. If not, you may be denied tax relief on the amounts you have paid them. You also need to check their employment status – are you certain that they are subcontractors who declare tax on their income, or are they more properly categorised as casual employees of yourself? In the case of the latter, it is likely that you will have to deduct and account for tax and possibly national insurance on their earnings from you.
For further reading on tax relief, please visit the TaxGuide.co.uk.
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