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

[northernladuk]

You don't understand the point being made. Who decides whether a DJ is worth £10k? Is that DJ worth £10k to everyone? Or only to some people? They are only worth what someone is willing to pay them at any given time. i.e. It's entirely subjective.

But can be challenged and corrected if need be.. See below.. So not entirely subjective.

Oh you are sure? That settles it then. No. Try again and this time engage more than your arse before you reply. There is no law which sets an upper limit on an individual's worth when it comes to private companies paying individuals.

There isn't but it can and will be challenged if need be. Earlspring Properties Ltd v Guest [1995] 67 TC 259 is just this. Court deemed the payments to be excessive for what she did and disallowed it. Doesn't need me to be sure.. It's enshrined in case law.

BIM37740 - Wholly and exclusively: duality of, or non-trade, purpose: remuneration, etc: 'excessive' remuneration: disallow the excess

Public money? We are talking about a private company paying an individual from privately earned funds.

1. It's not illegal to pay your spouse to work for you.
2. There is no upper limit for how much you can pay a spouse nor any law which specifies how much work they have to do. i.e. market rates don't come into it.

Both of these things have already been discussed in the Arctic case.

Whether the law will change in the future is irrelevent, this is the law as it stands now.

As above.

[WordIsBond]

Precisely, NLUK. The intent of the law is clear.

Yes, having someone you can implicitly trust to open your mail is valuable. It's easy to argue for a salary somewhat higher than you might pay someone else, but if it gets ridiculous, they can legally challenge it. The "wholly and exclusively" thing is still operative.

[SimonMac]

If you want to get into ethical then how ethical is it to get paid £600/day to post on ContractorUK? Ethics are totally irrelevent in my opinion.

If a DJ can get paid £10k for an hour pressing play on a CD player then I don't see why it's less ethical paying your spouse £650 for 5 minutes work each month.

Nobody can make a judgement on the value of someone's work to a private individual or company, not HMRC nor any judge or politician. We have a free market and that means I can pay whatever I want to whomever I want. If HMRC ask me what my wife does I'll tell them she opens my mail and since I don't trust anyone else in the world to open my sensitive mail she is in a unique position to command a very high rate.

Just don't be stupid and ask her to pay a standing order into your bank account each month because that IS tax evasion. However if she spends the money as she see's fit, on bills, food, restaurants. Well that's her money to do what she pleases and HMRC can do one.

One is a talent, and would be the top of their trade, would you advertise and pay a "stranger" to be an employee and pay them the same for so little effort?

[css_jay99]

remitting peanut NIC monthly to HMRC

So Is the most efficient Salary £8040 or £8060 ?


Just wondering if anyone is paying just slightly over £8060 which will result in a tiny NIC contribution and if they remit that to HMRC monthly?. e.g. £8100 will result in paying HMRC about 36p monthly which seems like taking the piss...

[northernladuk]

So Is the most efficient Salary £8040 or £8060 ?


Just wondering if anyone is paying just slightly over £8060 which will result in a tiny NIC contribution and if they remit that to HMRC monthly?. e.g. £8100 will result in paying HMRC about 36p monthly which seems like taking the piss...

You accountant hasn't sent you a guide or guidance on this by now? That's pretty poor of them to be honest. When to ring them to complain as them this at the sametime.

[css_jay99]

You accountant hasn't sent you a guide or guidance on this by now? That's pretty poor of them to be honest. When to ring them to complain as them this at the sametime.

I do the accounts myself..... and yet to make 1st payment in new tax year.

Both amounts cover LEL for state pension and will generate no NIC.

So what is the rationale for going up to the Primary threshold of £155pw?

[northernladuk]

I do the accounts myself..... and yet to make 1st payment in new tax year.

Both amounts cover LEL for state pension and will generate no NIC.

So what is the rationale for going up to the Primary threshold of £155pw?

If you need to ask you shouldn't be doing your accounts yourself.....

Sorry, I'm just so against this whole I do my own accounts but have to ask a free forum for advice the absolute basics of what to pay myself thing. You are dealing with potentially 100's of K's of money that isn't yours. One slip up, misunderstanding, or complete ignorance of changes to legislation is going to cost you one hell of a lot more than the 800 quid a year for a good accountant. I would argue people that think they can bookkeep (not even do accountants) will save themselves that by using an accountant let alone avoid an expense mess up.
I'm sure some people think they can do it but the danger is not knowing what you don't know.

We've currently got three people that do their own accounts posting right now and bit by bit all three of them are slowly unravelling.

[Danglekt]

Just to throw in, if your other half works and uses their full allowance on salary, it's still worth giving them shares , cos they get the £5k allowance now (assuming they dont have other shares).

GAAR to one side of course

[northernladuk]

Just to throw in, if your other half works and uses their full allowance on salary, it's still worth giving them shares , cos they get the £5k allowance now (assuming they dont have other shares).

GAAR to one side of course

When you say 'other half' do you mean wife, civil partner, unmarried partner.....................

[Beatrix Kiddo]

Just to throw in, if your other half works and uses their full allowance on salary, it's still worth giving them shares , cos they get the £5k allowance now (assuming they dont have other shares).

You've answered most of a question I have. However, what if you do that and then they pay the equivalent amount into the joint mortgage as an over-payment? I would benefit from that too, so it sounds like it might be viewed as a bit dodgy? (Although where does that end.)


(I world ask an accountant, but they'd think I was insane asking hypothetical questions now since I'm still working my notice on my permie job.)