Employing my Spouse

uncommonadvice

My wife is currently on Maternity Leave. At the end of this, after a short stint back at work, we are considering her coming to work for myself as a PA.

This wouldn't be a Full Time position, but would be Genuine. Wages around £100 per week.

At this level of wages, would I need to pay Employer NI contributions, and are there any other factors I should be taking into account?

All information would be gratefully appreciated. Thanks.

FatAndy

When I started working in accountancy practice twenty years or so back it was common practice to enter "wife's wages" into every set of sole trader accounts and the wife always managed to earn exactly £1 less that the tax allowance for the year!

It's a bit different these days as you may be challenged to prove that the work is actually being done. You also need to pay at least minimum wage and the wages must be paid, i.e. you have to hand over a cheque rather than just make a record in your accounts.

http://www.accountingweb.co.uk/anyanswers/wifes-wages-7

A wage of £100 per week would just keep you behold the NIC threshold but this might look a bit suspicious to a tax inspector in the same way that wives always used to earn a quid a year less than the tax threshold back in the nineties.

Pennywise

£589 per month is the optimum level of pay, where her NIC account (for state benefits) will be credited with NIC contributions, but neither you nor her will have to pay any NICs! No tax either at that level of salary (assuming no other income in same tax year).

As said above, she had to "earn" it and you have to pay it to her, and to get NIC credits, you need to apply for an employers PAYE account and submit annual employer returns to HMRC.