Can I use PayPal receipts in end of year TAX return?

Discussion in 'Legal' started by hellohello, Sep 14, 2010.

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  1. hellohello

    hellohello UKBF Newcomer Free Member

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    I'm from the UK and I outsource some of my work to people in countries outside of the EU and I was wondering how do I deal with end of year TAX return? I for example outsource a job for a client where the client pays me £100 and I pay someone else to do it for let's say £50. Once the job is complete, client pays me £100, I pay the outsourcer via PayPal £50 and keep £50 for myself. How do I prove this to the government? Are PayPal receipts enough? Thanks.
     
    Last edited: Sep 14, 2010
    Posted: Sep 14, 2010 By: hellohello Member since: Sep 14, 2010
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  2. sanjiv

    sanjiv UKBF Ace Free Member

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    Do you not have an invoice from the people that you outsource the work to?
     
    Posted: Sep 14, 2010 By: sanjiv Member since: Feb 15, 2010
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  3. hellohello

    hellohello UKBF Newcomer Free Member

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    Nope. It's different people at different times. What if I ask them to request the payment through PayPal? Will that count as a valid invoice?
     
    Last edited: Sep 14, 2010
    Posted: Sep 14, 2010 By: hellohello Member since: Sep 14, 2010
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  4. sanjiv

    sanjiv UKBF Ace Free Member

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    I believe that you can make invoices on PayPal. Get them to do that.
     
    Posted: Sep 14, 2010 By: sanjiv Member since: Feb 15, 2010
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  5. Williams lester

    Williams lester UKBF Newcomer Full Member

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    If you can get an invoice from the freelancer then great, use that. If not then just use the paypal payment as proof of expenditure. I assume you could back up the claim if necessary with e-mails etc detailing an agreement to do the work for a fee?
     
    Posted: Sep 14, 2010 By: Williams lester Member since: Oct 16, 2008
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  6. hellohello

    hellohello UKBF Newcomer Free Member

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    I've just realized you can, I'm just not sure if it's available in every country, hopefully it is. Either way, thanks.

    Yeah, I guess if I can't get an invoice I will then keep copies of emails detailing an agreement.

    Since I will be outsourcing work, the currency will most likely be from another country, e.g. USD. How do I calculate this in regards to the TAX return? Will I have to convert the sum using the figures given by HMRC or will the PayPal conversion of the amount to GBP will be enough?

    Edit: You have a very nice site, once I finish reading I may be interested in your services. :)
     
    Last edited: Sep 14, 2010
    Posted: Sep 14, 2010 By: hellohello Member since: Sep 14, 2010
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  7. Williams lester

    Williams lester UKBF Newcomer Full Member

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    Use the paypal converted figure, this will be fine.
     
    Posted: Sep 15, 2010 By: Williams lester Member since: Oct 16, 2008
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