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Posted Mon, 22 Aug 2022 11:15:35 GMT by 50276880
Good day. I am sole trader, work a IT consultant. I have three customers on my hand, I handle two customers, and I haven't time to handle third customer. So, I am outsource the customer to my wife. I would pay monthly consultant fee to my wife for this job. I get some websites from googles, Above business relationship may be identified to tax avoidance. So, is it disallowed to make this business relationship by HMRC? if not, do I need give supporting evidence for this relationship during submit self assessment?
Posted Tue, 23 Aug 2022 11:58:28 GMT by HMRC Admin 2

As long as the expense is for salary to a professional, your wife would need to be recognised as such. You would still declare the income from the third client as business income in order to offset the salary.

Thank you.

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