Best Tax Efficient Way To Stay Under The Higher Tax Band In 2016/2017

[northernladuk]

Just wander on back to the very post you quoted and look at it really, really carefully. "Try that instead" probably isn't there for decoration, it might actually be referring to something.

Ahh.. The FTFY.. I see it... Anyway, I'd bet my last dollar Erikur isn't doing that... as aren't the rest of the pay your wife because it's a way of getting money out of the company brigade... but apart from me winning the bet we'll have to wait for some case law for anything to change I guess.

[WordIsBond]

Another one that doesn't have kids.

I'm relatively confident they are mine. Poor beasts look like me.

[WordIsBond]

we'll have to wait for some case law

Arctic Systems.

I like yanking your chain on this, but I actually agree with you. I'm totally fine with giving a spouse equal-rights shares, joint ownership of assets in marriage and all that is something government shouldn't interfere with.

But a salary? Whether it can be legally challenged or not, ethically, it should only be consistent with the role in the company. I don't hesitate to pay £8K. But my wife operates PAYE, issues all invoices, pays all bills, does all bookkeeping, messes around with any banking stuff needed, discusses all contracts and other business decisions, signs accounts, etc., in addition to bearing the legal responsibility / liability of being a director. If our Employment Allowance weren't being chewed up by other employees, I'd pay her £11K without a second thought.

And if someone's wife is doing nothing (or spending an hour a month filing stuff for a one man band), an £8K salary isn't ethical, whether you can get away with it legally or not. So I actually agree with you, mostly.

[northernladuk]

Arctic Systems.

That's dividends.. I was talking about pay for FA.

I like yanking your chain on this, but I actually agree with you. I'm totally fine with giving a spouse equal-rights shares, joint ownership of assets in marriage and all that is something government shouldn't interfere with.

But a salary? Whether it can be legally challenged or not, ethically, it should only be consistent with the role in the company. I don't hesitate to pay £8K. But my wife operates PAYE, issues all invoices, pays all bills, does all bookkeeping, messes around with any banking stuff needed, discusses all contracts and other business decisions, signs accounts, etc., in addition to bearing the legal responsibility / liability of being a director. If our Employment Allowance weren't being chewed up by other employees, I'd pay her £11K without a second thought.

And if someone's wife is doing nothing (or spending an hour a month filing stuff for a one man band), an £8K salary isn't ethical, whether you can get away with it legally or not. So I actually agree with you, mostly.

You've been yanking my chain you cad!!

[LondonManc]

I don't. And to be fair, no one is being forced to have them.

They didn't explain how much they cost until mid-00s, at which point it was too late.

I'm relatively confident they are mine. Poor beasts look like me.

[WordIsBond]

you cad!!

[Danglekt]

So assuming the £8060 salary option to avoid the "fudged legislation", what will that cost the company? Wondering if anyone has the number to hand before I pull out a spreadsheet.

[psychocandy]

Yeah, what's the fiddle? Either you can use it because you aren't a one-director company, or you can't.

The article linked above was pretty good, but didn't make much sense on that point. If the rules as written don't exclude a company with husband and wife directors, they don't exclude that company, and such companies can and should claim EA. If they change the rules before the tax year starts to exclude those companies, those companies shouldn't claim it. If they don't change the rules but do change them for the following year, those companies should claim it for 16-17 and not for the following year.

There's no risk and no fiddle. Just follow the rules, and if rules change then follow the new rules. They aren't going to try to nail you retroactively for a couple hundred quid. They might for a lot more than that if they think they've got a chance, but not for this.

People may fiddle JSA, but you don't fiddle this one. Either you do or you don't have two directors, or other employees.

And it would be stupid to do it just for the EA. There are many good reasons to add a spouse as a shareholder / director. Employment Allowance is way down the list.

Even that article admits its a grey area.

Seems there are three possilities to me:-

1. Single director - not allowed.
2. Husb/Wife director but only one gets salary - ?
3. Husb/wife director but both get salary - ?

I think this article seems to imply that there need to more than one director getting paid a salary. Of course, bearing in mind the need to be a bit careful of ensuring you dont take the piss with the salary this is easy enough I guess.

But, ultimately, worth the risk for £237 a year?

[Danglekt]

Even that article admits its a grey area.

Seems there are three possilities to me:-

1. Single director - not allowed.
2. Husb/Wife director but only one gets salary - ?
3. Husb/wife director but both get salary - ?

I think this article seems to imply that there need to more than one director getting paid a salary. Of course, bearing in mind the need to be a bit careful of ensuring you dont take the piss with the salary this is easy enough I guess.

But, ultimately, worth the risk for £237 a year?

That is £237 quid in your pocket rather than feeding/housing the poor, I know what most contractors will do.

[psychocandy]

I agree - my wife has been a director of the company from day one, so it's not like I've just added her suddenly for this. I'll wait for InTouch to advise on what salary to pay, coupled with the complication of being inside IR35 for some of my income as well.

Same with me but does she get a salary?