Extra Income Question

rs82uk

Hi there, I work full time my wife only works a few hours a week and is looking after our young kids the rest of the time, I am a programmer I have been approached to do some freelance work, now I am bordering on 40% tax rate, would we be breaking any laws if any payment for any work done was paid directly to my wife into her bank account, and she then declared all the income in a tax return? She wouldn't be doing the work but as far as Im concerned the money is hers for her to spend on herself and the boys.

dzug1

Yes you would be breaking the law by failing to declare YOUR income. It's perfectly legal to give it to your wife, tax free - but your tax still has to be paid

rs82uk

But its not my income it never goes anywhere near my bank account and I wouldn't be the person invoicing the "customer" that would be my wife.

Caroline73_2

You are doing the work not your wife.

rs82uk

I thought that this would probably be the case in this crazy country of ours, there we have her not even getting close to her personal allowance and we can't make any use of it.

Mikeyorks

You have to smile don't you.

And he allegedly earns pushing £50k. So there's hope for all.

rs82uk

Mikeyorks wrote: »

You have to smile don't you.

And he allegedly earns pushing £50k. So there's hope for all.

Since when was the 40% threshold £50k?
My wife looks after the kids while I earn, there would be no problem if she went out of an evening to do some shifts in Tesco for a similar income, I don't get why it is any different, as a family we will still be paying far more tax than most.

wotsthat

I don't get why it is any different, as a family we will still be paying far more tax than most.

Because tax allowances are not transferable and never likely to be be as it would cost a fortune and would benefit the better off.

Couples are taxed as two individuals unless they are married AND ancient or after 2013 when, assuming you are a higher rate taxpayer, you'll lose your child allowance.

Mikeyorks

rs82uk wrote: »

I don't get why it is any different,

Exactly why I said 'you have to smile'! It's been explained, yet your take on it is that we live in a 'crazy country'?

There's legitimate ways to absorb unused portions of your wife's allowance - such as putting any savings in her name. Then there's your suggested way!

System

Mikeyorks wrote: »

You have to smile don't you.

And he allegedly earns pushing £50k. So there's hope for all.

Mikeyorks

The OP is asking a legitimate question about how to minimise his tax burden - posted on the MSE "Cutting Tax" forum section, which I think fits THE DEFINITION of what this forum is supposed to be for.

So, your snide comment did not help the OP in any way, did it ?

OP...
There may be ways of limiting your tax burden, the simple one has already been mentioned - Tax on Savings.

There may be other ways that I am not aware of, but others may post.

The only other thing I could think of that may be worth consideration would be if you operated as a company and employed your wife and paid her a salary, there may be ways of offsetting tax that way, but an accountant would be able to give you more advice on this.

Mikeyorks

BAA1 wrote: »

Mikeyorks

The OP is asking a legitimate question about how to minimise his tax burden - .

The original question may have been legitimate. But having been told that the proposition of masking his income by getting his wife to declare it, was not legal ..... the subsequent responses are unbelievable ('it's not my income' etc)

If you take the rose tinted glasses off long enough ..... I think you'll find it clear that is what I was responding to. It is a 'tax cutting' forum ..... you would presumably have it as 'tax evasion'?