UK- Cash in hand question?
I have a friend who is running her own charity. It is a small charity she runs from home where she provide poor families in London with cooking classes and healthy eating on a budget. She hires her sister to come in once or twice a week to do some Admin work for her and she pays her sister £40 - £60 depending on how many times she comes into work every week and how many hours she does.
Would my friend have to let HMRC know about that cash in hand money?
If you think about it it's only...lets say £200 per month her sister is making.
I read on Gov.uk website that the standard Personal Allowance is £12,500, which is the amount of income you do not have to pay tax on.
Her sister is obviously not making £12,500
Is this illegal?
Another question I have is that my friend now wants to set up payroll and now she wants her sister to go permanent. She has to fill out a Pay As You Earn Form.
She has 3 options from A - C that she needs to pick.
A----- This is my first job since 6 April and I’ve not been receiving taxable Jobseeker’s Allowance, Employment and Support Allowance, taxable Incapacity Benefit,
State or Occupational Pension.
B------This is now my only job but since 6 April I’ve had another job, or received taxable B Jobseeker’s Allowance, Employment and Support Allowance or taxable Incapacity Benefit.
C-----I do not receive a State or Occupational Pension.
As well as my new job, I have another job or receive a State or Occupational Pension.
WHICH ONE DOES SHE PICK ??? SHE HAS ALREADY BEEN WORKING CASH IN HAND ONCE OR TWICE A WEEK FOR HER SISTER.
@Catherine No and No
- TavyLv 710 months agoFavourite answer
if this is the friends only income and she does not receive benefits then she does not have to declare it.
- 8 months ago
HMRC would be very interested in this, as ALL employment income has to be declared, as would the Charity Commission due to funds not being spent on the correct things (you couldn't declare it as income).
The only option, as it is your sister, is if you were to gift her money and she volunteers to work for the charity free. You have a £3,000 gifting allowance per year (which then doesn't count towards any inheritance tax should you die within 7 years).
- LudwigLv 710 months ago
Is your friends charity 'legit.'? In other words, is it an officially registered charity? I strongly suggest she puts her accounts in order, otherwise she could get into trouble.
- Jackie MLv 710 months ago
You have chosen best answer but I want to add that anything a person earns must be declared to inland revenue as it is still used as taxable income - I only work part time earning less than £100 per week but employer still informs tax office. If the tax office find out the girl is getting cash in hand she will get done for fraud and the employer will get a large fine.
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- CatherineLv 610 months ago
How are we supposed to know? Does she earn money any where else? Does she receive any benefits?
- CliveLv 710 months ago
What does this have to do with travel?
- CaraLv 710 months ago
Even if you earn below the personal allowance, you are supposed to declare your income. Doesn't she have to fill in a tax form every year, stating her income? Doesn't she have any other income of any kind?