1. The wife (or multiples thereof) could be shareholders in the company and receive an appropriate amount of dividends. Not really effective if they are non taxpayers because the money will have been subject to CT and it's non reclaimable.
2. Wifey could be paid a smallish salary by the company for the admin services she undoubtedly provides. Effective because it is an expense reducing the CT bill and wife has no tax to pay until here personal allowances are used up.
3. The wife could incorporate WifeCo. The weekend work is undertaken by WifeCo. You individually happen to be the service provider. You provide your labour free, after all she is your wife and you are just helping her out. She then pays herself a salary from the nice fat profit she has made. Probably ineffective because the accounting costs will likely outweigh the tax savings.
Another point is that this could change any benefits you happen to receive in the for of WFTC and all that sort of stuff.
Whilst there is a general fear around 2 it's not uncommon. Also in the Arctic case there was no dispute over the modest salary (£4,500?) paid.
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You can't pay her unless she actually does work for the company. I don't do it but I know people who pay their wives a salary of £3,000 per year for doing the accounts, secretarial and personal assistant type work.Originally posted by rihan007 View Post
If you are outside IR35 and you are a higher rate tax payer then you can give your wife shares in the company and pay dividends out of the company profits to avoid putting yourself into the 40% tax bracket if you are fortunate enough to earn that much. Ask your accountant about it.Leave a comment:
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How can anyone think this is right? You can do what you want but there will be consequences if you get caught. If you are going abuse the system why not just not claim the money you earned.Leave a comment:
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You could, but if HMRC ever look into her tax return and discover what you've done the penalties will be the full tax due plus 100% for deliberate misrepresentation. For the sake of tax on £6,000 I'd declare it properly if I were you.Leave a comment:
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Can i invoice a company in my wives name?
hello all,
I am doing contract on weekends. My wife doesnt work. I would like to know if I can get my company to give the cheque in my wives name? My intention is , becuase she doesnt work, she can get tax free allowance of upto 6000 a year so I dont need to pay tax on the money i make during the weekend . I am only doing it for a month or so. Is that possible? please could any one help?
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