working for husband

wovonb

Just got dh's tax bill today - not huge but that's because we don't earn much! I am a home mum and having been looking for some kind of way to earn but struck me that if dh could pay me to do what I already do ( arrange insurances, answer phone, keep books) that maybe we could at least save something?
But what would be the best way to do it. Him employ me? Strikes me that could get complicated. I am currently self employed as I do some mystery shopping (earned less than £100 last year) so could I stay that but work for him? Not sure how I would define it as a business though.
Would be very interested in anyone's thoughts.

Thanks

kate

agrinnall

What sort of business does your husband run, is he self employed / sole trader / limited company? It is possible to do what you suggest (MPs do it all the time) but the best method may depend on how his business operates.

pinetree

Hi You could do this in the 80's/90's to save on paying tax but the government stopped it for us but not them Not sure how you can do it now im sure someone with knowledge about this can help

pinetree

Hi another thought, we had a good accountant which helped us, they would know all you need to help you

wovonb

He is a window cleaner and works for himself, self employed. So I end up answering the phone etc for him when customers call and I always arrange all the admin side of things for him.

zygurat789

So, how much would he have to pay someone, suitably qualified, to do this work? At the very least you could be paid minimum wage X hours worked and this would, presumably save 30% of your wages on his tax bill.
But don't overegg the pudding and don't forget the fringe benefits - you do get to sleep with the boss :rotfl:

ceeforcat

As long as the amount paid (must be at least minimum wage), hours worked for duties etc. are reasonable, there should be no problem.

Also be aware of your new status, I recall one aggrieved client from many years ago whose wife, when asked by HMRC, stated that she was a housewife. Not according to her husband's books she wasn't.

Pinetree - that is interesting - never heard of HMRC 'stopping' this perfectly legitimate tax saving exercise.

chrismac1

Anything under £102 per week and your husband doesn't have to operate a PAYE system. It's very common, where I have clients doing this:

1. I make a note on file of the work being done by them, and especially any third parties my client's spouse is dealing with. So if the salary is ever questioned, we can say "Call Mr. X of ABC Limited and so on" and the HMRC guy then knows to give up the chase or there will be people queuing up to give evidence that the spouse is working in the business.

2. A couple of clients where the duties are a bit more than just paperwork - for example arranging contracts with customers - have a salary going through of over 102 per week but under 139 per week. These clients are operating a PAYE system and filing end of year returns, at which point the spouse will get a year's credit towards State benefits including pension. Where clients ask for something like this and it's clear the spouse is not doing much in the business I say that either the spouse has to be more involved - and be seen to be more involved - or we're not claiming the salary as an expense.

chrismac1

"fringe benefits - you do get to sleep with the boss"

What is the correct box on the P11d for this, zygurat?

pinetree

Hi yeh ceeforcat im a bit confused now lol they did something about working for a spouse I thought it was about tax obviously it couldnt have been, anyone know what it was?

ceeforcat

Another thing, make sure that they are actually 'paid'. A simple adjustment in the accounts is not enough. If you are going to earn £60 per week, make sure that there is some visible transaction to back this up (as there would be for any other employee).