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Before I pester my accountant just wondered if this is possible:
I'm a self employed higher rate payer by about (in the higher band by about 10k), my wife doesn't work but spends all day looking after our little baby and doing house jobs, and will be doing this for the next few years.
Can I employ her and pay her a salary for this housekeeping, or is this complicated to do?
Thanks
Maybe you can pay her to keep your office tidy and sort out your receipts etc?
I'm assuming you're a Ltd company? If you are then you could add her as a shareholder and pay her dividends upon which she'd pay no personal tax...the company would have no employer PAYE liability also.
However, she would need to have some sort of "job" to justify the drawings, which dependent on what you/your company does, could be the tricky bit.
I believe you can for admin and office stuff but not for "housekeeping".
It has to be "reasonable" though and reflect the value of work performed.
Meeee, what your suggesting is allowable and also a BIK so you would be taxed on it. As others have said employ her for admin work.
Edit. Ignore that your self employed.
Hmmmm...
You could threaten her with the sack if she burns the tea!
Making her a shareholder is probably the least hassle, otherwise, yes, just make up a vaguely plausible job. Just don't tell anyone...
EDIT: hang on... you do have a company don't you?
As above, you can pay her but she would need to be performing a legitimate role for your business. I believe a lot of people have tried to avoid paying tax in this way and it could lead to an investigation of your wider activities. Are your books squeaky clean?
Maybe she could become self employed (sole trader) you could employer as a subcontractor and as long as she didn't earn enough to pay tax there would be non to pay, but she could be registering for NI contributions.
BEWARE IANAA and there may also be ir35 considerations to be made.
Not a limited company just sole trader. Ah well I'll just leave her as she is. Thanks for the replies though
How romantic.... lucky lucky lady.
Hang on, you put a roof over her head and now you want to [i]pay[/i] her as well? 😯
😉
You can employ her to do [b]genuine[/b] work as in duties that are 'wholly and exclusively' in the performance of your trade and at a [b]reasonable rate[/b] given her skills, market rates etc. There's usually a number of things a spouse can help with or does on the admin side especially so have a think and go from there. Unfortunately you cannot claim a deduction for payments made for looking after the kids, being a 'house spouse' or similar as whilst they 'allow' you to work they put you in a position to do so which is not the same as carrying out the trade.
Most self employed people I know have ltd companies so that they don't pay high rate tax.
Have you spoken to an accountant about that?
Most self employed people I know have ltd companies so that they don't pay high rate tax.
Have you spoken to an accountant about that?
+1
At ~52k p/a I'd have thought you could make going LTD worthwhile.
Are there no MPs on here. They seem to know a lot about employing family members in made up jobs.
Employ her as a sub contractor and get her to provide invoices. She will of course need to register as self employed.
She will of course have to do a job for you and that isn't keeping the house.
Can I employ her and pay her a salary for this housekeeping
Oh pleeeeease ask your accountant this 🙂
(And record the answer 😉 )
paulwf - Member
Most self employed people I know have ltd companies so that they don't pay high rate tax.
Have you spoken to an accountant about that?
POSTED 9 HOURS AGO # REPORT-POST
Depends on how you organise finances and what circumstances allow. After 9 years I still struggle to make being Ltd (and the additional hassle and lack of privacy allow) be more attractive than being a partnership .