how do i show my wages officially when self employed??

[lydiathetattooedlady]

me and my mum are in partnership together now running a small wool shop-i am taking wages from the shop, it is written in our accounts book but how do i show it officially for when i need to prove my income??
we're in partnership but the business is in my mum's name as its only been in last two weeks we decided for us to be partners. my mum takes no wage as she doesn't actually work in the shop and its still getting established so we are a bit confused!!
also i was working for her since november and again my wages were written in accounts book but do i need to do some pre-dated invoices for my time worked??
so confused!!

[KatyMac]

OK are you a partnership? in which case your need partnership paper drawn up which will detail your wages, how much and when they can be drawn

Or is your mum the boss and she will generously split the profits with you?

Or are you the boss and you will give her some of your profits?

[lydiathetattooedlady]

ooh good questions! erm she owns it i manage and run it, at the moment i am taking money for wages, but when we start doing children's clothing which she makes she'll take some too.
think it's a case of splitting profits in ratio of time worked and garments made...she'll make clothes whilst i hand knit gaments. does that make sense?!

[lydiathetattooedlady]

ooh should have said-we have agreed on £X amount wage for a day worked in the shop, which is how my wages work at the minute.

[KatyMac]

OK so she is the boss and putting in A amount of work for which she will be paid A time £B money for

You are paid £X per day so they are wages not self employed so you or your mum need to run a payroll - it's very easy

[islandofsodor]

Either you start to run a PAYE scheme and become an employee of the shop or you do it on a self-employed basis in which case anyone needing proof of your oncome will want to see the last 3 years accounts.

[KatyMac]

I doubt you would class as S/E unless you do similar work for other people

[lydiathetattooedlady]

thankyou for your help ladies! would you happento know the official people i could contact to sort this out??

[KatyMac]

HMRC (her majesties Revenue & customs)

I think it's .gov.uk

They will send you a CD-rom & it's really easy to run it

[CantSleepWontSleep]

As Katy has said, you are not self-employed according to what you have said. This means that you must pay PAYE, and the business must pay employer's NI, or there will be heavy fines to pay.

Who do you need to prove your income to?

[Eddas]

if you are a partner in the business then you will be self employed and get a percentage of the profits. then money you take each week/month will be known as drawings.

If you are an employee of the business you need to run a payroll.

If you have an accountant contact them before you contact the Revenue. You need to deal with this asap as if you are an employee then the payroll must be dealt with by 19th May and if you are a partner you should notify HMRC that you are self employed as you need to start paying NIC.

HTh

[lydiathetattooedlady]

i was more thinking about the future what with mortgage stuff, not that we're thinking of moving yet!
ive been paying NI since november as we thought id be classed as self employed so im up to date with that. i have just had a S.E. tax form to fill in for next year and it got us/me wondering cos some of the questions cafuffled me!

[Eddas]

your income will be the profit from the business, it won't have anything to do with the amount you take out, and if you want a mortgage they will look at the last 3 year's accounts.

If you've been paying NIC then you a self employed and won't need to run a payroll.

the tax form will be for the last year not the coming one will you're accountant fill it in for you? if so then don't even read

[KatyMac]

Eddas - if she is only working in one place for one company she will not meet the criteria for self-employed (I could be wrong)

[KatyMac]

Lydia - speak to Business Link tomorrow (they are easy to find just google)

They will clarify whether you are S/E a partner or employed - it really needs to be sorted soon

[Eddas]

she's not working for a co, she's a partner in a business, totally different

[KatyMac]

Well she isn't unless there is a partnership agreement in place

[KatyMac]

look here

[Eddas]

take a look here it syas an agreement is a good idea, not a necessity, so i'm sure they're in partnership

[Eddas]

lol exactly the same page