Self Employed And Paying Wife For Work

golfball13

Hi,

Just after a bit of advice to see what the best way to go about this.

I'm a driving instructor, and while I'm teaching, my wife takes calls, books in lessons and deals with any other enquiries.

Last tax year she only earnt £3,000 so I thought I could pay her a small amount for the work she does.

Would she need to register as self employed? What paperwork would I need to keep to satisfy the taxman?

Cheers

Rob

terryw

Quite acceptable. Make sure you actually pay the money and keep a paper chain, even if just by cheque. Your wife should report a new source of income to HMRC

Cook_County

Your wife would of course be employed so you would need to set up a PAYE scheme and give her and HMRC P60s. An employment contract paying at least the minimum wage would be prudent.

McKneff

Wouldnt it be possible to save all the hassle and pay her nothing.

Then just 'gift' her £3k each year.

Sorry if thats just silly, just a thought.

bengalknights

As long as she is on as a employee through PAYE then there is no problem

golfball13

Thanks for the replies. I've spoken to a few people about this and the simplest way to do this is for my wife to become self employed and invoice me for the work she does

Mojisola

golfball13 wrote: »

Thanks for the replies. I've spoken to a few people about this and the simplest way to do this is for my wife to become self employed and invoice me for the work she does

If you are her only client, I don't think she'll get away with claiming that she's self-employed.

Mikeyorks

golfball13 wrote: »

I've spoken to a few people about this

You haven't spoken to HMRC ............ and they have the casting vote!

She will not fit their criteria of 'self employed'.

There's an 'Employment Status Indicator' tool here ....... if you want to plough through it :-

http://www.hmrc.gov.uk/calcs/esi.htm

..................... or perhaps this section is easier to process (I thought they'd removed it when they created the ESI tool) :-

http://www.hmrc.gov.uk/paye/employees/start-leave/status.htm

One particular bit will stand out?

In most cases, employment status is straightforward. As a general rule, a worker is:

• employed if they work for you and don’t have the risks of running a business
• self-employed if they’re in business on their own account and are responsible for the success or failure of their business

ceeforcat

If you are paying your wife a small amount - say a couple of thousand you do not have to set up a PAYE scheme. There is no requirement unless her earnings exceed the lower earnings limit for National Insurance.

There is no need for her to inform HMRC about this new source of income as long as she remains a non taxpayer. In this respect terryw represents the correct view.

However, make sure that the money is actually paid. Also ensure that your wife is aware of this employment as HMRC is not averse to checking.

In short, if you are paying your wife £50 per week or so for the tasks that you have indicated, I see no problem whatsoever.

blue_monkey_2

terryw wrote: »

Quite acceptable. Make sure you actually pay the money and keep a paper chain, even if just by cheque. Your wife should report a new source of income to HMRC

How would the wife report a new source of income if not self employed?

blue_monkey_2

ceeforcat wrote: »

If you are paying your wife a small amount - say a couple of thousand you do not have to set up a PAYE scheme. There is no requirement unless her earnings exceed the lower earnings limit for National Insurance.

There is no need for her to inform HMRC about this new source of income as long as she remains a non taxpayer. In this respect terryw represents the correct view.

However, make sure that the money is actually paid. Also ensure that your wife is aware of this employment as HMRC is not averse to checking.

In short, if you are paying your wife £50 per week or so for the tasks that you have indicated, I see no problem whatsoever.

Can you explain to me why it would not be subject to BR taxation if it is a 2nd job, please.