Sole trader to partnership - tax implications

[Thewindycleaner]

Hi.
I'm a window cleaner and my wife has been unemployed since she lost her job in 2013 although she does help out with some of the non window cleaning duties of my business. ie banking, washing & drying cloths and updating my diary etc. I've been assured by a friend who knows a bit about business that I can form a partnership with my wife and split the profits 50:50 thereby saving tax. Would this be acceptable? Or would the tax office have a problem with that? Obviously though, I do the vast majority of the work, in fact all of the work that I actually get paid for.
I just don't want to do this and then get hammered with a massive tax bill years down the line.

Cheers

 

[john1989]

Unless your mate down the pub is an accountant, any advice is best taken with a pinch of salt.

Have you thought about paying your wife a fair (market rate) wage for the work that she does?

 

[Energise Accounting]

You could form a partnership with your wife their is nothing wrong with that. however, if you are going to do a 50:50 split she will have to do half of the work.

otherwise just pay her market rates for the work she dose do.

 

[UK Contractor Accountant]

I thought the income shifting legislation was put on hold by the last Government?

After hmrc's loss of the Artic Systems income shifting case and the fact that the spousal gift exemption overides the Settlements provisions I can see nothing wrong taxwise with the proposed 50:50 split between H & W.

 

[Thewindycleaner]

Thanks guys.