Helping out and free labor

2024

Self employed tradesman I am and helping out a family who are friends of mine who are doing up an old cottage/house.

No money is exchanging hands what so ever but what's the legalities of it since I'm self employed.

This person did give me a hand for free 20 years ago when I was badly stuck doing work in my own house and now I'm doing the same now .

I know no one would ever know about it but like I said, what's the legalities of it in tax law.

Mellor

If you're not being paid, why do you think it will affect tax or anything along those lines

Allinall

Depending on the value of the work, it could be classed as a gift, and taxable as such.

2024

https://www.boards.ie/discussion/comment/123997238#Comment_123997238

You just never know with the way tax laws are set up. This is why I'm asking.

2024

https://www.boards.ie/discussion/comment/123997244#Comment_123997244

Maybe just a few thousand. 2-3k Max if even at that..

Allinall

https://www.boards.ie/discussion/comment/123997509#Comment_123997509

Then you have nothing to worry about.

Nor do the recipients of the work.

Just be careful not to include any expenses in your own tax return.

2024

https://www.boards.ie/discussion/comment/123997512#Comment_123997512

👍

No, definitely won't be putting anything in. I'd say 10-15 days labor is be helping for free broke up over a few months. Nothing drastic.

Mellor

https://www.boards.ie/discussion/comment/123997505#Comment_123997505

BUT I don't understand what you think you might be taxed on?
You are earnings are zero. What different does it make if that is tax free, or taxed at 50%.

2024

https://www.boards.ie/discussion/comment/123997750#Comment_123997750

Again, you just never know with the tax man.

When self employed and once you hit the threshold before moving into the next tax or vat bracket, and if I'm helping a friend out what if they say this free labor throws me into the next bracket if it's taxable even thou I'm not receiving anything for it. As suggested above, gift taxes or other taxes that I don't know about.

banie01

Given your spelling of "labor" versus "labour" it is important to specify what jurisdiction you're in. Labor is the US spelling, the advice here is very Irish centric.

Regarding any tax owed, you aren't earning via the job or claiming expenses or offsets, so no liability on your part.
Regarding gift tax, that's not your liability and would not accrued on a gift of less than €3k in a single year from you to the recipient.

I'd also be fairly confident that any effort to tax someone on labour provided to a friend in renovating their home would be a waste of an audit by Revenue.
The potential tax liability is as near worthless as to be not worth even a compliance check.

Mrs OBumble

In Ireland, gift tax is payable by the recipient, not the giver.

But if Revenue thought you were bartering (I'll work for you this week, you work for me next week, no cash changes hands), they could assess liability for that.

Mellor

https://www.boards.ie/discussion/comment/123997866#Comment_123997866

I'm helping a friend out what if they say this free labor throws me into the next bracket if it's taxable even thou I'm not receiving anything for it.

How could free labour, for which you don't earn anything, put you into a different tax bracket.
Not even a tax question, just the simple addition aspect.

Gift tax applies when you receive a gift. You aren't receiving anything.

2024

https://www.boards.ie/discussion/comment/123997965#Comment_123997965

Yes, this is what I was thinking.

He did give me a hand 20 years ago but it wasn't a barter as in, if you help me on my house, I'll help you when you do yours. Just two friends helping each other out when seeing the other one going through a bad time.

2024

https://www.boards.ie/discussion/comment/123997892#Comment_123997892

Im in Ireland. I'm just a dafty with spelling lol.

2024

https://www.boards.ie/discussion/comment/123998129#Comment_123998129

https://www.boards.ie/discussion/comment/123998129#Comment_123998129

Yes I understand. But again, you just never know what way the tax system works so hence the question. I did remember reading somewhere that even thou you done something for free, the vat still might be needed paid on it. I'm just being cautious Incase I end up with tax liabilities in the future if I didn't check it up first.

Rocket_GD

https://www.boards.ie/discussion/comment/123998407#Comment_123998407

You will not end up with a tax issue. You don't need to declare anything.

For all the tax man knows you just took some extra days off this year.

2024

https://www.boards.ie/discussion/comment/123998431#Comment_123998431

I only work 6-8 months of a year 😁

Rocket_GD

https://www.boards.ie/discussion/comment/123998440#Comment_123998440

And this year you're just doing paid work for 5-7 months.