Income splitting looked at again

[VectraMan]

I wouldn't be surprised to find my local garage who are run by a husband and wife and are a limited company use this. In their case the wife runs reception, deals with customers and paper work, while the husband and two employees working on servicing and fixing cars. Now is the wife's contribution of less value than the husband's?

Indeed, but where the wife is making a contribution there's no question of it being fair and reasonable to split the income. But this is a contractors' forum, not a small business forum, and you can bet that 99% of the people here who are doing this are not husbands/wives who split the running of a business, they're husbands/wives who share the ownership of the husband's business (or the wife's business) to avoid tax.

When the Tory Chancellor put this measure in (can't remember who) around the last recession he admitted there would be some tax avoidance but his aim was to encourage people to start small businesses.

But why should only married people get this incentive to start a small business? Why doesn't it apply to all people equally? You could cut corporation tax, forget the IR35 nonsense, have exemptions for employers NI, all sorts of things that would encourage people to start a small business. Why is it reasonable and "fair" to only encourage married couples to start a small business?

[xoggoth]

Tend to agree. Think that point should apply to a lot of things like inheritance too. How come you can't leave to another family member say?