Dads business should he employ mum or should she be an owner?

bbdave

Please could anyone help?

My dad has a dog grooming business and my mum has given up her job to work with him.

She currently gets working tax credits and doesnt really want to lose this.

We are just a little confused would it be cost affective to be employed at minimum wage for 30 hours and pay tax and national insurance and still get the tax credits?

The other problem we have she has been working for dad since August and still not registered as employed can it back dated?

Not sure if i've explained this very well?!?

Murdina

If your dad is employing your mum he needs to set up a PAYE scheme asap. If he has an accountant ask him or her to help with this so he gets things on the right track.

An alternative might be for your mum and dad to be in partnership - so again if he has an accountant they could maybe just run through if this might work out better.

Tax credits are based on household income. Your mum and dad should be declaring both their incomes to the tax credits office. I am concerned from the way you have worded your post that this may not be the case.

If they are both self employed (ie in partnership) they need to be able to show they both meet the hours threshold for tax credits but this is not so hard when you bring in all the time needed to run a business ie doing books and paperwork, advertising and so on - it's not just actual dog grooming time.