Ltd Company - Paying pension conts for my employee/wife

[chrisl]

I know myself as a director can pay company contributions into my pension, but if my employee who is my wife (paying her £6k per year) wants to make contributions as well to her pension, i assume i can as the employer top it up by agreeing to pay the same amount again and get myself tax relief on this against CT.

I know alot of big companies have pension schemes for their employees so i cant see why a one man limited can not do it also.

Is it really that simple or does anything special need to be done/applied for?

[lje]

I know myself as a director can pay company contributions into my pension, but if my employee who is my wife (paying her £6k per year) wants to make contributions as well to her pension, i assume i can as the employer top it up by agreeing to pay the same amount again and get myself tax relief on this against CT.

I know alot of big companies have pension schemes for their employees so i cant see why a one man limited can not do it also.

Is it really that simple or does anything special need to be done/applied for?

You can pay in to your employee's pension. I don't believe that she has to make any personal contributions.

[Robot]

I know myself as a director can pay company contributions into my pension, but if my employee who is my wife (paying her £6k per year) wants to make contributions as well to her pension, i assume i can as the employer top it up by agreeing to pay the same amount again and get myself tax relief on this against CT.

I know alot of big companies have pension schemes for their employees so i cant see why a one man limited can not do it also.

Is it really that simple or does anything special need to be done/applied for?

What does she do for the company that merits a £6k salary? Most contractors on here say they can do the bookkeeping etc a couple of hours a month, lets say it takes her 10 hours per month that is an hourly rate of £50 per hour, most bookkeepers earn £12 - £25 per hour.

And now you want to justify a pension payment

[Wanderer]

What does she do for the company that merits a £6k salary?

That's none of your bloody business.

[Random]

a wifes value added services, definitely premium markup expected

[northernladuk]

a wifes value added services, definitely premium markup expected

By who? The wife and HMRC?

[northernladuk]

That's none of your bloody business.

I would say it is. If the guys is asking for advice and is actually fudging the system without realising Robot could be point out that the OP is flying close to the wind trying to evade tax by over paying his wife for next to nothing and then trying to further add to his woes by paying her a pension and when HMRC comes a knocking she does nothing and the OP is in a whole host of problems. It would be highly tempting to do this but really is just falling foul of HMRC.

It is not an unreasonable question and to be honest the way I read it is isn't a question more than a statement of surprise

[Random]

is there any point in paying your wife more, why not just give her dividends?

[IR35 Avoider]

The sum total of salary and pension contributions you pay your wife must be the same amount you would pay someone you are not related to to do the same work.

If it's more, HMRC can disallow the extra as an expense in calculating you corporation tax.

Obviously it's not clear-cut what you would pay a book-keeper you found in the yellow pages, or how many hours your wife actually works, so there is some wriggle-room. As with all expenses, what sounds vaguely plausible when you deduct it will probably be a lot harder to justify while looking into the eyes of a tax inspector sitting across the table from you. If accountants offered a service where they role-played the inspector in a mock interview I suspect 90% of the expenses contractors claim would not be claimed.

[xchaotic]

Henry Ford himself and many other big entrpreneurs have said that if you're in the business just for making money then you're doing it wrong.
You set up a business to create workplaces for other that lack that entrepreneurial spirit.
And if that person happens to be your wife, why not give her all the social benefits that you can (legally) afford?