Organising and participating in neighbourly work
Neighbourly work refers to helping relatives, friends or neighbours, participating in your housing company activities, or supporting the activities of sports clubs and other such organisations. Neighbourly work does not involve remuneration and it usually does not require any specialist skills. The work is of limited duration and temporary nature.
Neighbourly work may be arranged by individuals, as well as housing companies, school classes, NGOs and other organisations, local authorities, etc. Business enterprises may not arrange neighbourly work parties to carry out their normal work assignments, but they may participate in organising events such as non-profit drives.
People participating in neighbourly work voluntarily donate their contributions free of charge for the benefit of someone in need of help or for the common good.
Neighbourly work can involve cleaning, moving house, renovation, gardening and landscaping, cooking, or any other tasks suitable to be carried out as neighbourly work. By way of example, construction of the base or roof of a small house or a minor renovation of a flat can be carried out as neighbourly work by skilled friends or relatives.
Neighbourly work does not generally require any specialist skills. The duration of such work must be limited, and the amount of work involved must be reasonable.
Neighbourly work cannot be used to perform any work that should be remunerated by pay, fee or some other benefit. In connection with major neighbourly work parties, the organiser must be able to prove, if required, that no remuneration was paid for the work.
Tasks requiring specialist skills may not be carried out on a neighbourly work or ‘barter’ basis. An accountant and an architect, for example, may not provide each other with their respective contributions as reciprocal neighbourly work. Instead, each is required to invoice the other for their work, so as to include it in their accounting and tax records, as usual.
While neighbourly work is not included in the scope of the Occupational Safety and Health Act, the organiser may still become liable for damages. The organiser should assume responsibility for the health and safety of participants. Likewise, participants in neighbourly work are obliged to use any personal protective equipment and ancillary equipment provided for them.
Neighbourly work should not be used to carry out any tasks that involve major responsibilities or risk. In practical terms, it is very difficult to hold a neighbourly work participant liable for a construction defect, for example.
It is not compulsory to take out insurance for neighbourly work participants, but it is strongly recommended for work such as construction. A private citizen’s group insurance for neighbourly work also covers any participants not included in the immediate family.
Housing companies can also take out group insurance policies for neighbourly work. These policies generally cover any damage during neighbourly work or other unpaid work that is carried out by inhabitants. The person who caused the damage should submit a claim for indemnity to the relevant insurance company. The housing company is obliged to provide information on the incident.
Participants in neighbourly work parties do not receive pay or any other benefits; nor are they usually reimbursed for expenses. The organiser usually offers them something to eat and drink and the chance to use the sauna, etc.
Traditional neighbourly work carried out without any compensation does not result in any tax consequences for the participants in or the beneficiary of such work. Tax-exempt work also covers unpaid work with direct benefits for the community; maintaining a sports field or selling tickets at an association’s event, for example, does not generate any taxable income and does not involve any obligation to declare.
The tax treatment of any other type of work will be decided by the Finnish Tax Administration on a case-by-case basis. Members of an association may do some work for a party that pays the association for their work. In such cases, the Finnish Tax Administration will decide whether such work is treated as tax-exempt neighbourly work, the association’s taxable business activities, or a situation where an individual is donating some of their taxable earnings to the association, for example.