Commission tax implications

[NextPoint]

I have a friend who referred me some business and to say thank you, I would like to give him a commission from the business generated. Does anyone know what the tax implications of this would be?

[Maslins]

Expense for you, income for him...

Get him to send you an invoice.

[NextPoint]

If he's not self employed, how does that affect him?

[Zeno]

If he's not self employed, how does that affect him?

It's an interesting point (if you are an accountant, not so much if your not...)

If you do it as suggested and send him a % of business generated then he will have to declare this income on a tax return and pay tax on it. This will not necessarily mean that he is self employed but depending on the arrangement you have it could put him in this situation if it becomes a regular occurance.

There was an interesting thread on the general forum regarding the ethics of payment for referrals.