Wife as a secretary or assistant or company director

[rorybracker]

My wife has already got 20% in my LTD. She has recently left her job and at the moment I am considering one of the below three option:
- company secretary
- assistant to Managing Director (me)
- company director

I am trying to understand the key difference between these three roles and decide which of these would be the best from legal, accounting and financial perspective the most beneficial option? Any thought?

....disclaimer: I have advised this with my accountant and they seem to be thinking that company director is the best option. However I am interested to hear other opinions.

[SueEllen]

Company Secretary means she is an officer but you are the one who makes all the decisions and has the ultimate legal responsibility if you screw up something. link

Director means she has as much legal responsibility over the company as you. If you do a short contract abroad it sometimes helps to have another director as you can easily argue that your business is based in the UK. link

Assistant to managing director means she is just an employee.

What one to choose? It's up to you.

[northernladuk]

What's the long term plan for your wife? Is she going to go back to work or not. You shouldn't be changing your structure just to suit breaks inbetween work.

[SueEllen]

What's the long term plan for your wife? Is she going to go back to work or not. You shouldn't be changing your structure just to suit breaks inbetween work.

Somebody can be an officer of a company, company secretary or director, and have another job. However in those cases they don't end up on the pay roll though they are entitled to expenses for company business.

[northernladuk]

Somebody can be an officer of a company, company secretary or director, and have another job. However in those cases they don't end up on the pay roll though they are entitled to expenses for company business.

Yeah. I was just a bit nervous when he says he 'already' has. I assumed he might be changing the shareholding to make use of her unused tax allowance and then swap the shareholding back if she was going to work again.

[TheCyclingProgrammer]

Regardless of her employment situation, she should at least be a company officer (Co. Sec. is fine) so if you ever close the company down in the future and have any significant level of reserved profits, she'll be eligible* for entrepreneurs relief on her 20% share. Otherwise she could face a hefty CGT bill if 20% of the remaining profit is worth a decent amount and she's a higher rate tax payer (it will also save tax if she's a basic rate payer).

That aside, what do you actually want to accomplish? Do you want to pay her a salary of some description?

You could:

* Make her director or company secretary - many people agree that this in itself entitles her to some form of basic salary. What you define as basic is a conversation for between you and your accountant - I'm sure many people pay their spouses up to the personal tax allowance even if they do no other work but that doesn't mean HMRC would like it. If she's a company officer, IMO they'd struggle to argue against such a relatively small salary but speak to your accountant.

* You could make her an employee, or make her a company officer with an extended administrative role that may justify paying her a higher salary.

Things to bear in mind is that if she has an employment contract, then you may need to look into dealing with pension auto-enrolment. On the plus side you should be able to claim the employers NI allowance.

[*] assuming the government hasn't completely abolished or heavily restricted ER by that point...who knows!

[Alan @ BroomeAffinity]

If you're putting her on the payroll but not as a company officer (director or co sec) you'll also need to consider auto-enrolment legislation.

[craigy1874]

If you're putting her on the payroll but not as a company officer (director or co sec) you'll also need to consider auto-enrolment legislation.

Unlikely to be a massive problem based on the salary for an assistant...

[northernladuk]

Unlikely to be a massive problem based on the salary for an assistant...

My assistant get's every penny I earn

[MrMarkyMark]

My assistant get's every penny I earn

Have you thought of offshoring