Paying a spouse a wage

[Michael75]

Hi everyone, I hope someone can help me.

I am currently registered as self-employed as I run a small holiday planning company. As this business is in the early stages I am not expecting to be making much in the way of profits for the next 12-18 months.

Over the coming weeks my other half will also be setting herself up as self-employed in order to work as a florist. Initially - and possibly as an on-going arrangement - I will be helping her out by selling on the market stalls for her, maybe three or four days a week for which she will be paying me.

Please can you advise how this will work tax-wise. Will I have to be registered as her employee or is it simply classed as an allowable expense to her? What forms will we need to complete? What are the relevant threshold limits we should be aware of etc etc.

Please note that we are wanting to play everything by the book as we do not wished to be harassed for cheating the taxman!!

Many thanks
Michael

 

[andygambles]

See who makes the most money and then invoice each other to take advantage of tax free allowances.

You will probably be treated as connected income anyway (my wife and I have been). But you still get the overall tax free allowance.

 

[elaine@cheapaccounting]

She may need to register as an employer and put you as an employee - the rules are here:

http://www.hmrc.gov.uk/paye/intro/register.htm#1

Good luck

 

[Michael75]

Ok. So if she pays me less than £107 per week (the NI lower earnings limit) then can she count this as an 'allowable expense'?

 

[Scalloway]

Any wages paid are an allowable expense. It would be advisable to to keep something like a receipt book to record payments.

 

[justintime]

Ok. So if she pays me less than £107 per week (the NI lower earnings limit) then can she count this as an 'allowable expense'?

£107 a week will allow you to work approx 17 hours a week. You need to be careful of the minimum wage regulations, currently £6.08 an hour.

 

[andygambles]

£107 a week will allow you to work approx 17 hours a week. You need to be careful of the minimum wage regulations, currently £6.08 an hour.

Just do not record hours anywhere then this won't matter. Just bill it as sales consultancy as a whole.