Paying yourself and spouse wages....

[IR35FanClub]

If I offered to do all of this for £550 per month, would we have a deal? If I get a good few of you on the go I'll be able to give up on accountancy!! For the record, I'm not offering any other wifely duties...

Craig

I'll give you £500 just to do my ironing! That's about £5 an hour. Shame its below minimum wage or we'd have had a good deal.

[Jessica@WhiteFieldTax]

The 2nd point doesn't count as you have to be clothed - other people without wives who work for them wear clothes and look respectable.

Depends. Can't claim costs on professional clothes thats true, but if work involves you getting dirty, eg installation and grovelling around with cables, then it would be a legitimate claim.

[convict]

If I offered to do all of this for £550 per month, would we have a deal? If I get a good few of you on the go I'll be able to give up on accountancy!! For the record, I'm not offering any other wifely duties...

Craig

So for 500 a month you'll drive me to work indefinitely if the issue arises, do all my PA type stuff and work unsociable hours doing an unspecified amount of admin and logistics type work?

Even if you said yes, you couldn't do this for more than one person as you'd eventually get caught out and need to be in two places at once etc. Sure you could 'employ' people and offer it as a service but then you'd need to factor in profit etc. and I'm not sure it's a workable model given the uncertain and open-ended set of requirements.

[Wanderer]

So to summarise; If you are genuinely in business (eg, outside IR35) then your spouse can work for the business and the government have no appetite for bringing in a family business tax to prevent a director paying salary and/or dividends to their spouse.

The government isn't stupid and they will be under no illusions that in many cases this is simply income shifting by the director to avoid paying tax. They considered legislating against this but decided not to - it seems to me that they are willing to allow this tax break in order to encourage and promote small family businesses because it's good for the economy...

[northernladuk]

So to summarise; If you are genuinely in business (eg, outside IR35) then your spouse can work for the business and the government have no appetite for bringing in a family business tax to prevent a director paying salary and/or dividends to their spouse.

The government isn't stupid and they will be under no illusions that in many cases this is simply income shifting by the director to avoid paying tax. They considered legislating against this but decided not to - it seems to me that they are willing to allow this tax break in order to encourage and promote small family businesses because it's good for the economy...

I think you are making a rather dangerous assumption there. Just because HMRC are not aggressively chasing this does not mean they are happy with it. It is more likely it to be not cost effective or down on the list of priorities. They will be quite happy to pursue individuals abusing it as we have seen a few times with politicians. I would guess it is one of those things they will have for as part time of a bigger place investigation rather than directly targeting it.

[VFV]

Relevant question so I post here instead of starting a new thread.

I am looking at the possibility of employing my younger brother (living and studying in Greece) as an assistant in my Ltd co, to look after the usual general admin for a salary just below the NI threshold.

The issue of whether the salary can or cannot be commercially justified has been covered in the thread, my two questions are:

1) Can I employ someone who is not resident in the UK and has no National Insurance number in the UK? My guess is no but is there a workaround here?

2) Are the rules different for a non husband-wife relationship, a sibling relationship in this case?


Thanks

[malvolio]

Relevant question so I post here instead of starting a new thread.

I am looking at the possibility of employing my younger brother (living and studying in Greece) as an assistant in my Ltd co, to look after the usual general admin for a salary just below the NI threshold.

The issue of whether the salary can or cannot be commercially justified has been covered in the thread, my two questions are:

1) Can I employ someone who is not resident in the UK and has no National Insurance number in the UK? My guess is no but is there a workaround here?

2) Are the rules different for a non husband-wife relationship, a sibling relationship in this case?


Thanks

1) No, but it's not difficult to overcome that. Get them an NI number

2) Yes. S660a still applies fully, under the connected persons rule. It's precisely what it was meant to prevent in the first place.

3) And one for you - why? What are you trying to acheive?

[VFV]

Thanks for the reply. I send a few hundred every month to support him with his studies anyway, so a working arrangement with a tax benefit on top would work out very well.

[northernladuk]

Thanks for the reply. I send a few hundred every month to support him with his studies anyway, so a working arrangement with a tax benefit on top would work out very well.

..but unfortunately not.