Setting up Ltd company to pay husband for childcare?

le_loup

Oh! So they weren't looking to get benefits from the rest of us taxpayers then.
That's OK.

John_Pierpoint

No they are just trying to hang onto the money they have earned = it has already been pointed out that they don't qualify for child benefit.

Perhaps they should reduce their income by working less so they then do qualify for benefits from the rest of us? This is the one-high-earner-trap.

I know of at least one couple who are doing just that; now that it is not just the unemployables that face tax traps, when trying to work for a living and raise a family. Paid any child care costs recently?

Is this in the country's interest?

grey_gym_sock

if it's taken too far, tax avoidance can be greedy. but this query didn't strike me that way. i think it's fair enough to ask if there's simple way of being more tax-efficient. it's when there isn't, but there might be a really convoluted way of getting round intent of the tax legislation, and somebody tries to do that, that it might be greedy. wanting to understand your options is OK.

zagfles

There are minor benefits you can gain doing this such as paternity pay if you have another child - but it's much better if the wife gives up work as she can them get maternity pay which is far more (yes the system is still that sexist!).

I know someone who did this many years ago. Employed his wife to cook, clean etc. Paid her an amount over the NI LEL but below the PT and within the tax allowance. So she paid no tax or NI, but did get NI credits. This meant she got maternity pay when they had their second child! (he paid it but claimed it back). It also meant she got NI credits rather than HRP (but these days there's no difference).

ManAtHome

If you have any taxable savings, you could move them into your name to get the interest tax free.

xylophone

If you have any taxable savings, you could move them into your name to get the interest tax free.

That would depend on the amount of interest received and any other income he might have from other sources.