Paying Wife Redundancy

[northernladuk]

Seriously? How many times have I been in corps where they merge division x with team y and MrBloggs has decided to leave (a nice way for saying redundant). Or the team is getting restructured ...

The work still needs to be done but by someone else and often in a cheaper location - So I m not sure I buy your argument

Keep going.. You are winning....

[TheDogsNads]

I do like the ops attempt at creative accounting

It does strike me as particularly interesting that employers up and down the company do give very generous redundancies well above the statutory minimum without anyone claiming that the employer was trying to fiddle the tax man

If anything Someone leaving a company should get minimum redundancy because he will be useless to the company in the future but that’s not what happens in practise. Someone divorcing their partner *would* try amd pay the minimum so why not the employer employee relationship

I accept that this employer is related to the company by way of spouse but I’m not convinced at all it’s a non starter

Seriously, you think a contractor doing 'creative accounting' to give their partner a redundancy payment is the same as a big corp making staff redundant and paying them off and both are fiddling the taxman?

That's impressive logic.

[NowPermOutsideUK]

Seriously, you think a contractor doing 'creative accounting' to give their partner a redundancy payment is the same as a big corp making staff redundant and paying them off and both are fiddling the taxman?

That's impressive logic.

Well i took some inspiration from here https://www.contractoruk.com/forums/...ght=redundancy

And in particular "cobblers.

When I left the NHS I was paid well above statutory minimum (approx eight times higher if I recall). Nothing to do with golden anything. Nothing exceptional. No toruble. No threat of dispute. Just NHS standard terms.
"

What I am saying is that when it comes to small companies people here automatically jump to the conclusion that some idea cannot be done because its not "ethically" right. But large companies do very often pay generous redundancies with no one blinking. Explain to me why that is allowed but the small company is not? Answer there is none.

Put differently if the admin employee was not his wife but a real temp staff would redundancy far in excess of statutory minimums be allowed? I think I know the answer to be yes

[anim]

I remember reading somewhere that if your wife is employed (contract, role, paye), you can make her role redundant.

For instance she could be part of customer relations and advertising team i.e. going places and trying to get you business.
Or she could be in the data processing and verification team.

Also she can receive up to £30 000 tax free.
Obviously check with your accountant.
Also I dont think £30k is a good idea, but something around statutory+little extra should be fine.

Redundancy is a redundancy no matter if it is a big corp or 2 souls corp, all the same in the eyes of the law.

[Scruff]

B.O.L.L.O.C.K.S.

If you do this, you won't have any.

IANYA

[WTFH]

Seriously? How many times have I been in corps where they merge division x with team y

0.

You’ve never been a contractor.
Always worked as a permanent employee, either through a consultancy or with an end user.

...and dreaming of tax dodges.

[northernladuk]

What I am saying is that when it comes to small companies people here automatically jump to the conclusion that some idea cannot be done because its not "ethically" right

That is not strictly true, particularly in this case. What you've got yourself wrapped up in are two completely different situations. Big companies make people redundant as part of business, cost saving, getting rid of individuals etc... They do it for a pretty good business reason. Contractors ask about it because it's a tax dodge. Trainging is the same. When we tell a techie they can't expense their MBA through the other company they often whine about how 'big companies do it'. Same thing.. they do it for a business reason, not to try and reduce their tax bill which is why the contractor wants it through the company.
You cannot go round comparing large companies with a tax dodging two person company. Well you can if you want to look a bit of a pillock I guess.

Get that through your head and then what is right and wrong very much comes in to play. Big companies can make people reducnant and pay them off yes but no, a small two person company trying to extract the company cash can't.

If you are going to get excited about dodge tax avoidance techniques you've got to apply much better analysis than whining about a big company can do it. You've got to look at it very objectively and you've also got to be prepared to walk away. Arguing with us doesn't change anything.

Also ask yourself this... If it can be done, why isn't it in every guide from newbie upwards? Getting your wife in the business is, but redundancy is not.. does that not tell you something.....

[NowPermOutsideUK]

0.

You’ve never been a contractor.
Always worked as a permanent employee, either through a consultancy or with an end user.

...and dreaming of tax dodges.

I ve been a contractor (well maybe a permietractor) for quite a few years but let’s keep on topic

I’m curious of your view if In this hypothetical example the employee was not the wife would you have any concerns about redundancy being paid out? What is it about wife as employee that makes this so special

[jayn200]

Ok. But having run redundancy programmes I'm fairly confident I know the relevant legislation. It's not about people leaving, it's about how they are compensated. And how they are taxed on their severance pay.

I don't believe you.

Quick search shows nothing of what you have suggested.

Please show relevant legislation showing that you can't consolidate redundant jobs responsibility and tasks to another position.

[malvolio]

I don't believe you.

Quick search shows nothing of what you have suggested.

Please show relevant legislation showing that you can't consolidate redundant jobs responsibility and tasks to another position.

Of course you can. But the specific post in the org chart that has performed those tasks can be removed - that's what redundancy means. What you can't do is make someone redundant then put someone else in that same post: if you do either you get sued for unfair dismissal or the tax relief on the first £30k redundancy payment is removed and the ex-employee now owes HMRC.

That's also why you can't easily re-hire some you made redundant and put them back into functionally the same role.

Don't confuse roles with responsibilities