Self employed, employing wife?

Timmne

Morning all,

Just wanted to check - is there anything stopping me employing my wife through PAYE if I'm self employed?

I'm taking on more clients and need her help in an admin capacity - about 30% of the hours I spend is paper moving so I need the help but don't want to use my wife if it's going to look dodgy!

LittleVoice

Your wife can be your employee and therefore paid through PAYE. It won't look dodgy!

orangeslimes

It's really common for self employed people to employ their wives- so I wouldn't worry. Just make sure that you fill in the right paperwork as an employer and that she is actually doing work for you!

Valli

naw...we only think it's dodgy when MPs do it - not least because of their geographical locations compared to their 'employees' and they fact they are employing full time students as 'researchers'.
Worry not!

sandiep

The Inland Revenue have passed new rules that let them take the wives income and add it back on and tax it as the husbands, and this is new tax avoidance legislation (and its not popular, and unchallenged I think as its not yet been all the way through the courts process yet)

So, it's really important that your wife is actually working and not simply being paid a salary to take advantage of her personal tax allowance. If you register for PAYE, and submit all the forms, pay her an hourly rate, even have a contract, and keep the paperwork all in order then you are doing it correctly, and disclosing it fully, and should have no problems.

Timmne

Thanks all - I shall get the paperwork sorted

(By the way, she will actually be working for her pay, I'm not that generous! )

Doh

i've been thinking about this, my wife does most of my admin work though i don't pay her for it would it not be easier to add her as a partner rather than go down the PAYE route? see has no tax free allowance as we are both employed full time, my SE is part time... though it would sheild some of my SE earnings from the 40% tax rate - any thoughts (sorry to thread hijack )

dunstonh

What about using her as a partner on the business rather than employing her?

My wife is on my business as a partner. Because of the shared liability that a partnership has, she may not do much work on the business side but she shares the risk and has an interest in the assets.