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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My son is employed 1 day per week as a music teacher.

Resolved Question:

Hello,
My son is employed 1 day per week as a music teacher. He is also a self employed musician. I do his tax returns. He 'operates' a string quartet with a friend - nothing legal and basically they only have a joint bank account where brides to be pay in the money and then he pays it back out to the players including himself and his friend. He and his friend also take money every so often to cover all the arranging players, music, bride correspondence, website etc. I log all this money he receives into his own account and use this for his tax return so I am confident he is taxed on everything he earns - but do I need to do more. I declare him as self employed, he has a UTR number but since they don't run a formal partnership (and his friend would not want this) then it is not really a company is it?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.

Hi.

There is no company as it would need to be a limited company registered with Companies House and HMRC.

Strictly, as there is a joint bank account it would be preferable to register a partnership but as the end result will be the same in that your son will pay the same amount of tax because a partner is effectively treated as self-employed, then it makes no real difference.

If your son's friend doesn't want to be in a formal partnership, then he and his friend should split all the income and expenses on a 50:50 basis or whatever proportions they split the income and expenses in and disclose their respective shares of the income and expenses in their individual tax returns. They should keep a record of the names and addresses and national insurance numbers of the other players who they sub-contract. They should also get the players to provide invoices if they can persuade them to.

I hope this helps but let me know if you have any further questions.

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