Can salary be paid into wife's current account?

YorkshireBoy

20/40% of nothing is still nothing!!

Sillychuckie wrote:

get it paid into your account (as you are currently), and then just transfer it yourself. so you'll get taxed on a few days interest (time taken to transfer).
Big deal...

Tax and interest won't come into it - will they?

If the transfer is initiated on the day the direct credit arrives, then the amount will be removed immediately from the account (and disappear into the BACS 'ether' for the standard 2/3 days). This means the closing balance that day, for the purposes of interest calculation, will be (virtually) zero.

I have to say this seems an awful lot of 'aggro' to avoid a little tax, and reminds me of the old joke about the husband who found someone elses wage packet on his way home from work one Friday - in the days before we were paid by BACS Direct Credit.

On seeing the disappointment on her husband's face, his wife says "what's wrong with you? You've found £140 and you've a sad face!" To which the husband shows her the pay slip and replies "yes, but look at the tax I've paid!"

Wyndham

I am assuming that the salary has had tax deducted from it by the employer at source? If so, then tax has been paid on the income and there is no more tax to pay on that. However, tax must still be paid on any interest accrued on the money from the bank, and I assume this is the advantage you are trying to get?

Yes, it's tax efficient to put any money in the name of the non taxpayer, so it makes sense to have savings etc in your wife's name as far as possible (but don't forget about ISAs). And I can't see why any employer would object if that is the way you want to do it. It may look as if she is then getting an income, but if tax has been paid on this money at source, and you are 'transferring' it to her, then no more tax will be due.

Naturally, if your employer hasn't taxed the income, and you are trying to do some tax evasion by this, then it is a very different matter and won't work.

adm_4

Thanks for all the replies.
Yes I'm taxed at source and I can't see how the T&C of my wife's bank would be broken?? Seems the tax is fine from replies. I'm asking because I'm soon to move my salary anyway (once I get the RBS £100) - we do have a joint account I could move it to. I'm wondering a little about the joining incentives that involve a BACS transfer, my wife would maybe then qualify even if the salary wasn't hers (I know I need to read the T&C carefully).

Paul_Herring

ejones999 wrote:

If your bank finds out that another person's wages are going into it you could be technically be found guilty of money laundering.

How is this money laundering? Citation please?

Paul_Herring

Just done some research - The Money Laundering Regulations 2003 section 2(1) defines money laundering as:

"money laundering" means an act which falls within section 340(11) of the Proceeds of Crime Act 2002[12] or an offence under section 18 of the Terrorism Act 2000[13];

Since there are no proceeds from a crime involved here, and I doubt there's any terrorism going on, I don't think there's really a problem with a person depositing their wages in their spouses account from this point of view

Edit - for those who want further reading:

PoCA2002 340(11):
http://www.opsi.gov.uk/acts/acts2002/20029--k.htm#340

TA2000 Section 18:
http://www.opsi.gov.uk/Acts/acts2000/00011--d.htm#18

Debt_Free_Chick

Paul_Herring wrote:

Since there are no proceeds from a crime involved here, and I doubt there's any terrorism going on, I don't think there's really a problem with a person depositing their wages in their spouses account from this point of view

I think the suggestion was that regular, large deposits in your wife's account - when there were previously none - could ring alarm bells at her bank and set off a potential Money Laundering investigation. The banks don't have to wait for proof of ML .. they have to investigate if anything looks "fishy".

jonesMUFCforever

It is the same principle as someone with a cheque made out to Joanne Bloggs trying to pay it into John Bloggs' account.
With BACS credits this is easier to do as there is no physical check of credits to account numbers.
We are being told that if we spot this happening we must report it.Whether this triggers a ML investigation or just a request for it to stop or close the account I do not know.

adm_4

ejones999 wrote:

It is the same principle as someone with a cheque made out to Joanne Bloggs trying to pay it into John Bloggs' account.
With BACS credits this is easier to do as there is no physical check of credits to account numbers.
We are being told that if we spot this happening we must report it.Whether this triggers a ML investigation or just a request for it to stop or close the account I do not know.

but who doesn't allow this and why? is it in the t&c of a current account?

your cheque analogy would be closer if joanne asked her employer to make the cheque out to john.

jonesMUFCforever

There are reasons why someone wants to have their wages paid into someone else's account eg their own a/c is up to its o/d limit and would be swallowed up, or someone has a ccj and unable to have an account or a bankrupt person etc etc.

regularsaver1

i've seen this before - a student and her bf's wages went into her account - it had to be reported