Spouse as only Director

[ChimpMaster]

Hey all

Just wondering so throwing it out there: is it possible for a spouse to be the only director of a company through which a contractor supplies his services?

I expect that the shareholding would be 50/50 and the contractor would be paid a salary too, as an employee of the company.

[northernladuk]

Is there any context to this. Is there a reason that you don't want to be that might affect the feedback?

[malvolio]

Hey all

Just wondering so throwing it out there: is it possible for a spouse to be the only director of a company through which a contractor supplies his services?

I expect that the shareholding would be 50/50 and the contractor would be paid a salary too, as an employee of the company.

Well, they wouldnt be a contractor for one thing... And if the spouse contributes nothing to the business, all the company income could easily be deemed by HMRC to be the worker's earnings and so treated as salary since there is bno business justification for such an arrangement. Meaning no retained profit and so no dividends anyway.

Bad idea, without a very good, justifiable reason.

[Wanderer]

Well, they wouldnt be a contractor for one thing...

So what? There is no requirement for a worker to be a director of the company they are employed by and hold shares in.

And if the spouse contributes nothing to the business, all the company income could easily be deemed by HMRC to be the worker's earnings and so treated as salary

Nonsense.

Re-read Jones v Garnett. In the judgement the Lords clearly stated that the intention of the arrangement was to avoid tax but that it was allowed because it fell within the exemption in section 660A of the settlements legislation. How is this case any different?

there is bno business justification for such an arrangement

So what? A husband or wife (or a couple in a civil partnership) have no requirement to provide a business justification for their company directorship and share structure to HMRC.

[Greg@CapitalCity]

In addition to the above, take a look at the agency side. Would they be happy for the contract to be signed by your spouse - or would they be happy for you to sign the contract on behalf on the company without being a Director. Check you can get that angle sorted also.

[Wanderer]

In addition to the above, take a look at the agency side. Would they be happy for the contract to be signed by your spouse - or would they be happy for you to sign the contract on behalf on the company without being a Director. Check you can get that angle sorted also.

Generally the contract will be signed by the primary contractor and also by an authorised signatory on behalf of the company.

Mostly it will be the same person who signs both parts but it someone else could sign on behalf of the company if the contractor is not the director.

There is also nothing to prevent the director declaring the contractor to be a duly authorised representative of the company with authority to sign contracts.

[TheFaQQer]

In addition to the above, take a look at the agency side. Would they be happy for the contract to be signed by your spouse - or would they be happy for you to sign the contract on behalf on the company without being a Director. Check you can get that angle sorted also.

I've never personally signed a contract, either with an agency or when going direct.

That's something that the company secretary (who is also a director but not a shareholder) does, and is remunerated for the responsibility of doing so.

[psychocandy]

Why would you want spouse to be only director anyway?

Why can't you be director and make spouse director too? And shareholder?

Surely its less hassle...

[LandRover]

Spouse as director

Isnt this what HMRC deem as aggressive tax avoidance?

[TheFaQQer]

Isnt this what HMRC deem as aggressive tax avoidance?

No. It doesn't avoid any tax at all.