Paying yourself and spouse wages....

[Jessica@WhiteFieldTax]

I am sure the accountants have a number of clients where there is a couple in the position described.

Has an inspecter ever raised comment?

Q1 yes lots
Q2 no never

Done. Sorted.

[The Spartan]

Out of curiosity, could you however pay a family member a for a few hours of ad-hoc work?

[IR35FanClub]

Given that directors of companies (small and large) have salaries in the hundreds of thousands, and that equates to hundreds of pounds an hour...

My missus has to listen to me go on for hours about this idea and that, By explaining it to her it fleshes out the ideas, and then she does actually prevent me from starting insane "Plan B" businesses. Couldn't I make her a director (not shareholder), make our after dinner chats "board meetings" and pay her £100 an hour for the privilege? Mind you at the rate I talk, I'd be broke and she would give up working as she'd be paid more than I invoice, LOL!

I'm sure loads of companies develop business plans that never go anywhere. Actually for once - one of them is going ahead - and I'll be posting about that on another thread later ;-)

[edit] I'd be quite happy to write down the minutes for evidence - I already keep note books full of tripe.

[northernladuk]

Given that directors of companies (small and large) have salaries in the hundreds of thousands, and that equates to hundreds of pounds an hour...

My missus has to listen to me go on for hours about this idea and that, By explaining it to her it fleshes out the ideas, and then she does actually prevent me from starting insane "Plan B" businesses. Couldn't I make her a director (not shareholder), make our after dinner chats "board meetings" and pay her £100 an hour for the privilege? Mind you at the rate I talk, I'd be broke and she would give up working as she'd be paid more than I invoice, LOL!

I'm sure loads of companies develop business plans that never go anywhere. Actually for once - one of them is going ahead - and I'll be posting about that on another thread later ;-)

[edit] I'd be quite happy to write down the minutes for evidence - I already keep note books full of tripe.

You can do what you want. The bottom line is you know what is abuse (I hope), I don't know why you try and justify it to us, you know it is wrong and so will the tax man. Question is what is your approach to the risk? If you are willing to take the risk, do it. No point trying to justify the unjustifiable. As I mention before, if you are going to do this, why not doctor your mileage and throw some fictitious expenses. If you think you are going to get away with it then might as well fill your boots.

[northernladuk]

Out of curiosity, could you however pay a family member a for a few hours of ad-hoc work?

Saving you what? Wouldn't a better option be to pay them out of your pocket and just forget the hassle for a couple of quid saved?

[NimbleJackAccounting]

Further Reading.

Northernlad you have been spot on with all your comments.

Back in 2005 there was landmark case on this called Arctic System ,makes of a very interesting read. A common sense approach to all things in life, serves you well.

Saving you what? Wouldn't a better option be to pay them out of your pocket and just forget the hassle for a couple of quid saved?

[ASB]

Q1 yes lots
Q2 no never

Done. Sorted.

I rather imagined that would be the answer.

[IR35FanClub]

Ok idea number 27...

My last gig 2 agents were involved. This was a silly mistake made by an ex colleague of mine ... agent B were a secondary supplier. the colleague actually got me the job through a recommendation and i didnt need an interview. Told me to get in touch with agent B as he thought they were the ones recruiting, It was actually agent A, but they hadnt found anyone and had subcontracted. If Id gone to agent A I could have bagged an extra £40/day. anyway He didnt know the deal with the agencies. But its got me thinking... what is to stop my Mrs setting up a (real) recruitment agency, doesnt matter if its succesful or not, it will have at least 1 person on the books, me, and she can take her 15% for actively trying to find me work infuture? in fact shed be doing more work than my current agent does.. they only take an invoice and pay it to me and get over a grand a month. They arent out looking for work for me personally, and i doubt if they will be my agent for the next gig it will be someoe else.
This doesnt seem dodgy as long as she does search for the work and does try and advertisies and maybe even becomes successful at it. If not, nevermind, shell be well withing the 20% tax limit so can bag some of my fee.

[northernladuk]

Ok idea number 27...

My last gig 2 agents were involved. This was a silly mistake made by an ex colleague of mine ... agent B were a secondary supplier. the colleague actually got me the job through a recommendation and i didnt need an interview. Told me to get in touch with agent B as he thought they were the ones recruiting, It was actually agent A, but they hadnt found anyone and had subcontracted. If Id gone to agent A I could have bagged an extra £40/day. anyway He didnt know the deal with the agencies. But its got me thinking... what is to stop my Mrs setting up a (real) recruitment agency, doesnt matter if its succesful or not, it will have at least 1 person on the books, me, and she can take her 15% for actively trying to find me work infuture? in fact shed be doing more work than my current agent does.. they only take an invoice and pay it to me and get over a grand a month. They arent out looking for work for me personally, and i doubt if they will be my agent for the next gig it will be someoe else.
This doesnt seem dodgy as long as she does search for the work and does try and advertisies and maybe even becomes successful at it. If not, nevermind, shell be well withing the 20% tax limit so can bag some of my fee.

And pay CT on it as well yadda yadda

It's a false set up so fails. If you create anything for reasons just to cook your books it is a sham. The govt are clamping down on any set up that exists to gain tax advantage and not for a commercial reason. Cleverer people than you have tried all this before.

Enough of the tulip ideas wasting everyone's time. If you have more, ask your accountant.

[Jessica@WhiteFieldTax]

Northernlad you have been spot on with all your comments.

Back in 2005 there was landmark case on this called Arctic System ,makes of a very interesting read. A common sense approach to all things in life, serves you well.

HMRC lost Arctic systems, fair and square. They have not yet got legislation through to the contrary, and it doesn't appear to be immigrant.

After coming up to 30 years in this game, 3500 or so clients, I've seen two challenges on family wages. One for a sole trader who claimed a deducton without actually showing they were paid, the other for a property investor who was paying his less than bright daughter £30,000 a year - in 1989 - for doing very little. Other than those extremities challanges generally don't happen for a sensible spousal salary for the admin/books/co sec role.

I'm no cheerleader for people not paying their fair share, but equally there's no obligation in any one not to make the most of the business and family structure they have.