My mother is self-employed and I am currently unemployed.
She proposed an idea to me that I got a bit iffy about. She wants to pay me for "consulting services" -- this way she can essentially reduce her income to a point where she is paying less tax and I won't need to pay tax on the money she gives me because it will be under the minimum threshold.
In reality, I do help her every now and then with various bits (specific to her work, e.g.: translation, graphic design, software tutorials) but I would not think of it as consulting... then again, "consulting" can be open to interpretation.
I want to ask about the feasibility and legality of this.
Would I need to sign something to say that I am now a consultant / contractor for her?
- I am unemployed because I am in the process of setting up my business. The business is not currently earning me money. Whatever money I have or will invest in the business are wholly my own.
- I am not relying on my mother for money at the moment, in fact I often share the load when it comes to family expenses.
- The idea here is that any money she does pay me for consultation will belong to me, as she does indeed owe me money