Spouse relations

[Ravello]

^^ Hence the split in opinion I guess

The advice I've had is to take NMW so I'll stick with that as well.. Classifying outgoings sounds particularly tricky, especially if they're shared with the missus..

[Mustang]

Me neither, but I guess that I'll go with my accountant's advice and pay NMW...

Hmmm.....my accountant is excellent but he does stick to the 'letter of the law'....!!

[Old Greg]

Remember I am not a lawyer or accountant!!

Me neither, but I guess that I'll go with my accountant's advice and pay NMW...

[Mustang]

I have seen it a couple of times on here and my accountant mentioned it. The basic premise is that if the salary you draw will not cover your outgoings then you dividends are being drawn as a salary replacement therefore they will be subject to tax and NI.

Remember I am not a lawyer or accountant!!

I would be more than happy to reduce my salary!!

[Old Greg]

AFAIK, the key thing is about risk. If you are audited and the salary you draw is seen to not be covering your outgoings, HMRC will tax your divis as 'deemed salary'.

Where do you get that info from? I understood that 'deemed salary' relates to being caught within IR35, and has nothing to do with outgoings.

[Mustang]

I'd also add that opinion is split regarding taking a 'market rate' salary. Some accountants advise it, some suggest taking NMW others suggest taking nothing above taxation level.

AFAIK there's no evidence that paying more/less salary makes you any less/more likely to be "on the radar". You're either outside IR35 or not..

AFAIK, the key thing is about risk. If you are audited and the salary you draw is seen to not be covering your outgoings, HMRC will tax your divis as 'deemed salary'.

At the moment, my outgoings are quite high and I am not prepared to take that risk.

[Ravello]

I'd also add that opinion is split regarding taking a 'market rate' salary. Some accountants advise it, some suggest taking NMW others suggest taking nothing above taxation level.

AFAIK there's no evidence that paying more/less salary makes you any less/more likely to be "on the radar". You're either outside IR35 or not..

[Old Greg]

Here's a thought - others can comment on its validity:

In addition to paying her a 5k salary why not have her hold 1/2 of the shares? This should reduce your combined tax liability on divis.

[FarmerPalmer]

Mrs OG has 1/3 of shares which I think is probably OK with regard to S660 after the Arctic case - search here and on pcg website. She is also company secretary but does not receive a salary. I believe there's no tax advantage to her receiving a salary unless she is earning nothing or very little (under the 5k-ish threshold).

This is just what I do, so seek advice elsewhere. Or see what Malvolio has to say when he gets round to you.

My wife is also company secretary, and currently has no income - she was self employed until April this year when she shut down her e-tail business as it was no longer making enough money to compensate for all the hours she was putting in.

So in this case - it is worth paying her to do my admin - and it means I don't have to do it

I see that accountants are advising to have a market salary to keep under Revenue's radar, so if I paid myself a reasonable market salary - say 36k , paid her a small admin salary say 5k - pay into both of our pensions and take any profit as divis (3/4 to me, 1/4 to my wife) then I should fall under their radar ?

... which is exactly what I was doing pre April 2000

[Old Greg]

33 views and no replies ... sounds like it might be a touchy subject

Mrs OG has 1/3 of shares which I think is probably OK with regard to S660 after the Arctic case - search here and on pcg website. She is also company secretary but does not receive a salary. I believe there's no tax advantage to her receiving a salary unless she is earning nothing or very little (under the 5k-ish threshold).

This is just what I do, so seek advice elsewhere. Or see what Malvolio has to say when he gets round to you.

[malvolio]

More likely with the thousands of column inches dedicated to the Arctic case over the last month or so, we thought you might have found the answer...

Which, by the way, is "Why ever not?"

However, watch for the next PBR when you will find that Gay Gordon has pre-prepared something for Darling Alistair to announce to stop the blatant unfairness of wives and husbands sharing the risks and gains of the joint efforts. But look closely because he sure as hell won't announce it in the house since it blows a large hole in the whole concept of individual taxation.

[FarmerPalmer]

33 views and no replies ... sounds like it might be a touchy subject

[FarmerPalmer]

Am I right in thinking that I can no longer ask my wife to do my admin (and get paid) or retain her 1/4 share in the company

... or is it still acceptable ?

... or is it dodgy ground ?

I've been out of it for too long - and my research seems to pull up conflicting advice.