It is easy to register for PAYE, and easy to use Basic PAYE Tools.
Pondlife's comment about your wife having to work for her salary is accurate but not if your wife is a director. Call it a director's stipend if HMRC ever comes asking. That's justification enough, for £8K, to convince them it isn't worth trying to cause trouble. I am unaware of HMRC challenging a spouse director's stipend since the Arctic case, which they lost.
When you pay a salary of £8K or even £11K, you not only get your wife a qualifying year for state pension eligibility, that amount is also an expense so you don't pay corporation tax on it. But is your wife getting a qualifying year via child benefit anyway? Does that render the state pension eligibility concern moot? I don't know how eligibility works for mothers receiving child benefit, but you might want to check this out before taking action strictly because of pension eligibility. If you are doing it to save corporation and dividend tax, of course, then it is worth it even if you don't need it for pension eligibility.
There's one thing that is screaming at me in your original post, though. You are not a full-time contractor, you are part time. I assume that means you have another job. That means the advice above to pay both you and your wife £11.5K is probably not sound. You might want to give more details here about your own specific situation, or talk to a good accountant. Whatever you do, don't follow the advice of a bunch of people on the Internet who don't have the full picture.
There are two great limiters to the advice you get here. The first is the fact that we don't have all the relevant data. The second is that not everyone here knows what they are talking about. But there is a great advantage, too. Even accountants get things wrong
(easy for me to say since I'm not one), and if the advice that is given is flawed, someone is likely to point it out.
Pondlife's comment about your wife having to work for her salary is accurate but not if your wife is a director. Call it a director's stipend if HMRC ever comes asking. That's justification enough, for £8K, to convince them it isn't worth trying to cause trouble. I am unaware of HMRC challenging a spouse director's stipend since the Arctic case, which they lost.
When you pay a salary of £8K or even £11K, you not only get your wife a qualifying year for state pension eligibility, that amount is also an expense so you don't pay corporation tax on it. But is your wife getting a qualifying year via child benefit anyway? Does that render the state pension eligibility concern moot? I don't know how eligibility works for mothers receiving child benefit, but you might want to check this out before taking action strictly because of pension eligibility. If you are doing it to save corporation and dividend tax, of course, then it is worth it even if you don't need it for pension eligibility.
There's one thing that is screaming at me in your original post, though. You are not a full-time contractor, you are part time. I assume that means you have another job. That means the advice above to pay both you and your wife £11.5K is probably not sound. You might want to give more details here about your own specific situation, or talk to a good accountant. Whatever you do, don't follow the advice of a bunch of people on the Internet who don't have the full picture.
There are two great limiters to the advice you get here. The first is the fact that we don't have all the relevant data. The second is that not everyone here knows what they are talking about. But there is a great advantage, too. Even accountants get things wrong
(easy for me to say since I'm not one), and if the advice that is given is flawed, someone is likely to point it out.
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