Q: Can Our Property Business Hire My Self-Employed Partner?
My partner and I are developing a large property into three flats. My partner is a self-employed plumber and is carrying out most of the work himself. Is it acceptable for his plumbing firm to invoice our development partnership for work carried out at the property?
Arthur Weller Replies:
Yes, it is acceptable for his plumbing firm to invoice your development partnership for work carried out at the property. I assume that he will charge standard commercial rates, in the same way that he would do work for anyone else, and not charge more. Since he is declaring the income earned from this work, and paying tax on it, it makes no difference to HMRC that your partner does the work or any other professional plumber.
This question was first printed in Property Tax Insider in August 2010.