Accounting Legality

[utrinqueparatus]

This is just a quick query as I will eventually take on professional advice.

I have a 12 month contract in place using an umbrella. I have been offered a Work from Home 12 month contract at nights with almost guaranteed renewal its pretty much an on call thing. I would be doing these concurrently.

So the question: My wife is unemployed and not likely to be for the forseeable future. How would the legality and the tax efficiency work out if my wife set up a LTD Co and put the contract through that paying me as a contractor via the umbrella but at a minimal rate and taking the majority as dividends. The contract is 7/365 paying £280pd 10 pm - 6am.

To me it seems the benefits would be an income for her and ergo a better credit rating but again not sure of the legality and tax efficiency.

Apologies if this is a poorly thought out idea.

[stek]

This is just a quick query as I will eventually take on professional advice.

I have a 12 month contract in place using an umbrella. I have been offered a Work from Home 12 month contract at nights with almost guaranteed renewal its pretty much an on call thing. I would be doing these concurrently.

So the question: My wife is unemployed and not likely to be for the forseeable future. How would the legality and the tax efficiency work out if my wife set up a LTD Co and put the contract through that paying me as a contractor via the umbrella but at a minimal rate and taking the majority as dividends. The contract is 7/365 paying £280pd 10 pm - 6am.

To me it seems the benefits would be an income for her and ergo a better credit rating but again not sure of the legality and tax efficiency.

Apologies if this is a poorly thought out idea.

Would she be doing real work or made-up work not to put to fine a point on it.

If the former might be ok, if the latter consider jail.

[prozak]

Would she be doing real work or made-up work not to put to fine a point on it.

If the former might be ok, if the latter consider jail.

Gaol for what?

[prozak]

Why not put both contracts through the new ltd company?

Pay your wife a salary. Let her be a shareholder. Pay dividends.

[Wanderer]

Why not put both contracts through the new ltd company?

Pay your wife a salary. Let her be a shareholder. Pay dividends.

WHS. For the amount of money you will be making, you are best to form a LTD company, wife and yourself as 50/50 shareholders, pay yourselves a wage of ~ £6,500/year each, the rest will be profits which will be split 50/50 as dividends.

7/365 paying £280pd = ~ 100k per year. Plus a day job? You are going to be a high earner and going LTD will save a LOT of money in tax. Don't mess about, get an accountant to do the figures for the scenario described above - we're talking 10s of thousands here...

[prozak]

In addition.

I can recommend "Salary vs Dividends" book from tax cafe.

[utrinqueparatus]

Would she be doing real work or made-up work not to put to fine a point on it.

If the former might be ok, if the latter consider jail.

As a director of a company that is work in itself so that point is not applicable.

I have taken on board your advice and I will approach a local accountant to work the figures of the scenario for me. I have been using an umbrella for the last 7 years purely because I don't understand all the taxes involved in running a LTD Co.

[Wanderer]

Would she be doing real work or made-up work not to put to fine a point on it.
If the former might be ok, if the latter consider jail.

Piffle. Everyone does this and no one has been sent to jail for it.

[stek]

Piffle. Everyone does this and no one has been sent to jail for it.

Do they and are you sure?

[utrinqueparatus]

Thanks all,

I have consulted a local accountant who has presented the figures for me and outlined the extra benefits available to me. I have decided to pay both myself and my wife £6500 p/a + £243 pcm each in childcare vouchers and take the rest as dividends. In regards to my wife working she will be employed as an admin assistant handling invoicing etc so will be in fact working.

Thankyou all very much for your advice.