PAYE, contracts and work place pensions

[RolfBaxter]

Hi all,

I was wondering if somebody can advise me on paying a salary to myself and my wife.

I am the sole director of a private LTD. I am outside ir35 (or at least, believe myself to be and should have a pretty strong case). My wife is not a fee-earner but takes care of my admin and marketing.

I wish to pay my wife and myself a salary. However, I do not want to have to deal with work place pensions and such like because the LTD is essentially a second income and we already have pensions in place.

My question is, as sole director, can I pay myself and my wife (through PAYE) without having to put employment contracts in place (and deal with pensions and anything else associated with ‘employees’)?

Originally I was under the impression that I would have to make her a director to be able to do this, but some other links I’ve read have suggested I don’t need to go this far. I keep finding very old posts on the related subjects but since so many rules and regulations have changed in the last few years everything I’m finding seems to be out of date.

Please could somebody advise?

Many thanks,
Rolf

[VillageContractor]

Hi all,

I was wondering if somebody can advise me on paying a salary to myself and my wife.

I am the sole director of a private LTD. I am outside ir35 (or at least, believe myself to be and should have a pretty strong case). My wife is not a fee-earner but takes care of my admin and marketing.

I wish to pay my wife and myself a salary. However, I do not want to have to deal with work place pensions and such like because the LTD is essentially a second income and we already have pensions in place.

My question is, as sole director, can I pay myself and my wife (through PAYE) without having to put employment contracts in place (and deal with pensions and anything else associated with ‘employees’)?

Originally I was under the impression that I would have to make her a director to be able to do this, but some other links I’ve read have suggested I don’t need to go this far. I keep finding very old posts on the related subjects but since so many rules and regulations have changed in the last few years everything I’m finding seems to be out of date.

Please could somebody advise?

Many thanks,
Rolf

Maybe, just maybe, that is what your accountant should be doing?

[TheCyclingProgrammer]

AFAIK if you make her a director OR company secretary without an employment contract then you wouldn't have to deal with auto-enrolment. That's the situation I'm in anyway.

[northernladuk]

Bearing in mind you are talking about £10's of K of money here and flirting with some very grey areas of legislation why aren't you booking some time with your accountant to discuss this rather than presenting a limited number of facts to a bunch of strangers???

I just can't get over the mentality that people bugger about with this type of thing on forums rather than asking a professional and doing it right.

[Fred Bloggs]

Sounds to me like she'd be better off being Co Sec and a 50% shareholder. Then pay in dividends so as to not pay EE and ER NICs.

[ASB]

https://www.nidirect.gov.uk/articles...kplace-pension

The above seems fairly clear.

If she is appointed as company secretary (or a director) and does not have a contract of employment then she is solely an office holder.

No enrolment is required for office holders.

But, if she is using her tax allowance elsewhere there is no tax saving to be made (save for potentially keeping you out of higher rates by paying her instead).

Of course what she is paid should be a fair rate for the job to keep squeaky clean.

[ASB]

Bearing in mind you are talking about £10's of K of money here and flirting with some very grey areas of legislation why aren't you booking some time with your accountant to discuss this rather than presenting a limited number of facts to a bunch of strangers???

I just can't get over the mentality that people bugger about with this type of thing on forums rather than asking a professional and doing it right.

Because it's cheaper and they get (sometimes) some sensible guidance for further research.

[northernladuk]

Because it's cheaper and they get (sometimes) some sensible guidance for further research.

<shudder>

[SimonMac]

I assume you are paying her a fair wage for the responsibilities and not just as much as you think you can get away with...


If she is earning under £5,773 (exact figure may need double checking) she is not entitled to Auto Enrollment

[RolfBaxter]

Thanks for the pointers all.

Indeed - I am beginning to think I should get an accountant. Since this is a second income and not going to be earning that much through it I am, for the moment, trying to keep things relatively simple without throwing money away at an accountant if it is unnecessary. Who knew paying my wife to do a bit of work for me would be so troublesome.