Salary for doing no work

ab7167

Following the budget announcement that education spending is to be cut by 25%, it is highly likely that I will lose my job in the next 6
months or so. Not such a bad thing, as I would like to be a stay at home mum for a while. However, we do need to make up my income from somewhere. Not all of it, but we do need slightly more than OH brings home to keep ticking over. So to my question - OH's employer has offered to split his salary between us so we can use both personal allowances. Quite simply, OH earns £58k. We would change that so he earnt £38k and I "earnt" £20k. Is this possible and what would be the implications?

withabix

If your OH's employer takes you on as an employee then no real problem from a tax evasion point of view.

However it WILL have an effect on your OH's pension if he is in a Final Salary scheme (and on his and his employer's contributions in a money purchase scheme) and other similar things like redundancy pay etc.

What happens if your OH's employer suddenly becomes less helpful and makes YOU redundant? Instant reduction in your OH's official salary to £38k....have you thought about that??

gizmo111

What about sick pay and salary matching if there is a job change?

Llyllyll

Not absolutely sure about this one, but I would suggest that as your “earnings” would be derived from the virtue of your OH’s employment (especially as you would not actually be doing any work for the company), then the full amount of £58k would be taxable on him.

One way to find out for definite - write to HMRC. They may well have some interest in it…

withabix

Llyllyll wrote: »

Not absolutely sure about this one, but I would suggest that as your “earnings” would be derived from your OH’s employment (especially as you would not actually be doing any work for the company), then the full amount of £58k would be taxable on him.

One way to find out for definite - write to HMRC. They may well have some interest in it…

There is nothing wrong with what the OP's employer is offering to do, AS LONG as they take the OP on as an employee.

They can pay her a salary for whatever they like - her job could be to answer the phone at home once a week and say 'hello, my name is OP. Goodbye'.

Llyllyll

withabix wrote: »

There is nothing wrong with what the OP's employer is offering to do, AS LONG as they take the OP on as an employee.

They can pay her a salary for whatever they like - her job could be to answer the phone at home once a week and say 'hello, my name is OP. Goodbye'.

OP states "Not such a bad thing, as I would like to be a stay at home mum for a while." There is no mention of being an employee. You are suggestingemployment whereas I am just basing my opinion (which is all it is) on the details provided.

ab7167

Actually, I'm actually qualified and experiences enough to do his job, so I may actually help out during busy periods anyway - but good to know I don't actually have to!

Yes, they would take me on as an employee officially. No pension scheme in place - OH does salary sacrifice into a stakeholdr pension and the company contributes the NI they save, but nothing more - so effectively totally self funded. We would do te same from my salary as well.

He gets full sick pay.

It's a very small firm and OH is a director - but I dontknow exactly what this implies. We haven't put any money in, so I suspect it is just a job title with no legal standing? No possibilty of salary matching (in a redundancy situation, right?) as I'd he was made redundant it would only be because the company was going under - in which case we would both be made redundant!

KathysBoy

I would have thought that both the OP and the employer will have to pay National Insurance,so you need to work out the net benefit carefully, before agreeing to this. Edit. On a quick calculation I estimate employer ni will be slightly lower, and a net benefit of about 280 pounds per month for the OP

Llyllyll

I maintain that the best people to ask are the tax authorities themselves – HMRC. If you put it to them and they have no problem with it then great – just make sure you keep all the paperwork. If you do it yourself and have not taken proper advice then there is always the possibility that it could cost you in the future (should they come calling).

ab7167

can you ask them things anonymously?

RayWolfe

Then people wonder why tax legislation gets more and more complicated each year ...
I'm certain the OP doesn't think she is evading tax. I'm sure she doesn't think she's a crook.