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I take dance lessons with one other person: we share the teacher's time 50:50 and pay half the cost each. Currently, my partner pays this money into my bank account and then I pay the teacher. However, I worry that the tax authority will see this as income for me & demand income tax on it, even though I see it as simply channelling their money to their expense, and not actually income for me.

Of course, I could come to an arrangement where we pay the teacher 50:50 and the money never goes through my account, but the teacher doesn't like this.

Is there another way? For example, is there some specific way to declare split-bills on a tax form and avoid it being called income?

niemiro
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2 Answers2

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There's no need to do anything. You don't need to declare it on any tax form, and if you are ever audited by the tax authority (HMRC), just explain what happened. Repayment of a debt/sharing an expense like this is not income.

Ganesh Sittampalam
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It sounds like you are repeatedly paying, for each lesson taken. In that case, you could take turns paying the bill, so that you pay one bill in full and your partner pays the next bill in full.

This way the teacher gets a single payment each time, and no money is channeled.

user985366
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