Anyone know how to...

[jstbcs]

Withdraw money from a small buiness account, to pay someone for 'consultancy' work. but they can only be paid cash in hand, and cant declare that they did the work. and the person who is drawign the funds out doenst want to be compromised, ie, cant just claim it is 'drawings' as it will effect tax credits, etc...

any ideas? or is there any lee -way in these matters?

I am not sure I understand your question?

My understanding is that you run a small business, and you need to make a payment to someone who did some work for you.

If this is the case, by withdrawing the money as drawings and paying it to the third party you are putting your self at risk for being liable for the third parties tax.

The easiest way would be to obtain a letter from the 'consultant' and pref their accountant stating that they are self employed and liable for their own tax. The work that they did for you would need to be considered to be on a self employed basis, and not as an employee of your business.

If it is deemed that they are an employee, you would be required to operate the PAYE system.

Its more of a commision payment, whch they cannot declare.

NO DODGY ACCOUNTANTS ABOUT 2NITE THEN? LOL

ooops caps