I have a client who is a non-exec director. He is paid a small amount each year - for 17/18, it was three payments of £200, so £600 for the year. I have previously pointed out that he is an office-holder and that these amounts should, in my opinion, be taxed under PAYE, but the organisation disagrees. I have always shown them as additional income, rather than self-employment and so he has never been able to claim expenses - but these would be minimal anyway.
Following the introduction of the new trading income allowance, I asked him to go back again to the organisation for the precise status of the fees. They say that they are consultancy fees and as such a source of self-employment, and they are backed up by the audit partner at the firm they use. As they are so adamant, I am tempted to claim the new allowance against them. But I have a nagging suspicion that they are not a self-employed source. Also the allowance cannot be claimed where the payment is made by an employer - does the same apply where the taxpayer is an office-holder but has a separate source of fees from the same organisation?
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