Tax allowance

Oliver_Sudden

I have a job that pays quite well but as mine is the only household income it barely covers the bills so I occasionally do some freelance work. I am a higher rate tax payer but as my wife is not working can this money be placed against her tax allowance (ie recorded as her earnings)? Or do I have to declare it as mine and pay 40%?

Mikeyorks

You can legitimately move Savings etc into the name of your wife in order to make best use of her unused allowances. You can't legitimately do the same with your income - until after it's taxed!

Merlin_Accounts

You said you did some freelancing - have you registered as self employed with H M Revenue & Customs? Or is the income very sporadic?

Assuming you are in business, albeit part time, you could pay your wife a wage or, possibly, look at setting up a partnership.

Another alternative to consider is setting up a Limited Company, particularly if you do not necessarily need to draw all of the income. There are lots of things to consider before doing this though.

:cool:

CLAPTON

if you receive self employed earnings you need to register with the HMRC within 3 months and start paying class 2 NI contributions by DD.