Wife helping husband with self employed business

Kaye1

Morning all,

Many thanks in advance for any help- I am bamboozled and getting through to the tax office seems to be impossible.

My husband has a self employed catering business, earning approx £3000 per year (it is part time.) As time has gone on, I have helped him out more and more- paperwork, invoices, ordering etc. I am totally happy to do so. I am a stay at home Mum with no income of my own, and so I usually do this after the kids are in bed.

It has always been unpaid- just helping him out as I am at home and he is out working.

I was wondering if there is any tax advantage to declaring my hours? I don't really want to be an employee as I assume there will be loads of paperwork attached?

I obviously haven't used the allowance I am able to earn that is untaxed.

It may be that I am barking up the wrong tree, so any advice would be welcome. I have trawled the HMRC website and I can't seem to see an answer.

Thanks

cotswoldaccountant

If your husband is already using up his personal allowance (does he have employment elsewhere in addition to his self employed catering business?) then it would make sense for him to pay you a wage for assisting with his book-keeping. The money that he pays you would be a tax-deductible expense in his business accounts, and you would not pay tax on any income which falls within your personal allowance.

As long as you are on a standard tax code (i.e. you do not have another job elsewhere) and as long as he pays you less than £473 per month, then he will not need to register as an employer with HMRC.

Please bear in mind that any wages paid to you by your husband must be physically paid to you - it is not enough to keep records of wages without evidence that payments have actually been made.

Hope this helps!

Kaye1

Oh cotswoldaccountant thank you so much! Yes, he has a full time job elsewhere, so his allowance is used up. It's one of the reasons I started to help as he is so busy.


Again, thank you for taking the time to reply, I really appreciate it. the information is very useful. These bloomin' tax matters!

nomunnofun

cotswoldaccountant wrote: »

Please bear in mind that any wages paid to you by your husband must be physically paid to you - it is not enough to keep records of wages without evidence that payments have actually been made.

Hope this helps!

My experiences of the consequences of making a simple book entry at year end, with no evidence of payment, lead me to second this comment.

Kaye1

Thanks, will bear this in mind and make sure the physical money gets moved!

chrismac1

Agree the last few posts. If the business were a little higher, it could be worth registering it as an employer to put through 473 per month for you (13-14, this will change on 6 April.)

This is just above the Lower Earnings Limit so it secures you a credit towards State Pension, but is well short of the point where any NI has to be handed over. It would need real-time information submissions.