Husband and wife contracting through same Ltd Co. - good or bad idea?

[craig1]

There's a further option of you employing her via your company and PAYE system. If she's going through an umbrella now, you can at least save the admin fees that the umbrella charges. Not ideal but I suppose it saves a few £ a month!

If you're having doubts about the long-term future of the relationship, regardless of how small, do not give away a single share.

Be aware though that if you do go the director/shareholder route then you run quite into MSC territory if, for example, she has no access to the bank or accounts. You'd truly have to share everything to totally eliminate that threat. Are you ready to do that?

Personally, I'd go with NLUK and get a second ltd company.

[Spacecadet]

Not the most tax efficient I will admit but nor is trying to get ex's out of your company. Something we have seen time and time again on here. Business and pleasure never mix in my book.

Aside from a few admin costs... how is running 1 company more tax efficient than running 2?
(Infact if you've got 2 companies than some costs might be declarable in both companies, e.g. use of home as office)

[northernladuk]

Aside from a few admin costs... how is running 1 company more tax efficient than running 2?
(Infact if you've got 2 companies than some costs might be declarable in both companies, e.g. use of home as office)

Dunno, wasn't bothered about going in to it but stuff like accountants and the like. Home office is 3 quid a day and claiming it twice would be a little suspect..

Anyway, was a glib comment to cover myself when someone jumped in to say 'Ah but you lose loads of cash if you do 2 LTD's'. Can't win either way LOL

[TheFaQQer]

1) She works through her own umbrella/agency completely separate to me on PAYE.

OK idea. Or (as someone else has said) pay her PAYE through your co.

2) I make her a director AND a shareholder of my company and pay her minimum wage and dividend relative to her shareholding.

Won't you have to sell her the shares? Or at least declare it as some kind of benefit.

3) I make her a shareholder only and “subcontract” work to her through my company (although she works as an Internal communications manager and I’m an IT project manager) so different business areas.

So, she would need to be declared as self-employed and you still pay her for the work done, plus dividends. Can't see the benefit, myself.

4) She starts up her own company and works through that.

That's what I'd do.

[SueEllen]

Dunno, wasn't bothered about going in to it but stuff like accountants and the like. Home office is 3 quid a day and claiming it twice would be a little suspect..

Depends how big your house is.

I know more than one couple who both have a separate office from each other at home.

[TheFaQQer]

Depends how big your house is.

I know more than one couple who both have a separate office from each other at home.

[Wanderer]

What option do you think is best?

A husband and wife have a special status under law so it's easier to make a recommendation. If you are not married then it's slightly tricky because legally you are two financially independent people.

The question to ask is how close are you financially? Do you have a joint bank account? Do you own a property together? Would you go into partnership running a business together? Do you consider things to be "yours" and "hers" or do they belong to both of you?

If you do then all means go ahead and trade through the same company. You can just split the total profit of the company and take half each to avoid higher rate tax. You will also save a grand a year on accountant's fees and a fair amount of admin.

If you aren't quite that financially together then you should setup separate companies. Try and get their year ends aligned (you can change the year end) so you both do all the admin stuff at the same time.