small business dilema

dankerrysmum

my partner has his own business which earns him on average £16 per annum before tax.he has asked me to do some partime work with him as i am not working ,it would be under the £6k tax threshold .so basically we would be sharing the hours and his earnings would drop to say £10 before tax.basically i want to know if this is a legitamate move or would it be viewed as a sort of tax evasion ie me paying no tax on 6k and him dropping his income and therefore paying less tax.i would like to find out before taking it any further

sandiep

If you are properly working, then no, it will be fine.
If you are not putting in the hours, and your partner has a tax investigation or aspect enquiry (which is usually around once every 3-5 years) then maybe.

Its a dodgy new bit of legislation that the revenue have tried to sneak in, to try and stop all those owners/directors partic those on higher rate paying their wives to be company secretary and for basically non-existent work.

It's not a move that's been well accepted, partic as it does impact on the genuine husband/wife businesses.

dankerrysmum

thanx for your reply,i have googled income splitting and got some background on it ,it seems the government have done a u turn for now anyway.i am a bit wary of doing this but to be honest i am doing some work for him just now anyway but it is unpaid ,just all goes into the family pot . but how could the investigators prove that you weren't working ?i mean if it was part time you wouldnt be contributing to bulk of the work anyway

Marg

You'd be surprised what conclusions the revenue can come too!!

If I were you I'd keep simple very clear records of the hours you put in each day/week and a record of the payments your partner makes to you - even to putting them into your own bank account if you can, so there's absolutely no doubt if the revenue decide to investigate.

You say you aren't working - be careful if you are on any type of benefit that there's no conflict with the rules of that as the benefit people also investigate from time to time.

Good Luck - hope you enjoy it - I've worked with DH for 15 years now - it's a mixed blessing!