Can I pay my step daughters wage into my husband bank account?

silent_meow

My husband and I have recently set up a limited company and bank account for his contracts to get paid into, he's contracting in IT and the money is pretty consistent. The company, shares, and business account are all in my name as director and sole share holder. I'll be paying him as an employee and myself a wage of £10k a year each. His daughter is 15, as as far as I understand, she can be paid a wage of £10k also. My question is, can this wage be paid directly into her father's bank account on her behalf?

phill99

As far as I know you can, but it looks mighty suspicious, don't you think? And is she really working for the company or is it a tax dodge?

In fact, just rereading your post, it is a tax dodge isn't it? Who are you contracting to? Starbucks?

Mistral001

You need to contact Creative Accountants Are Us. You will find them in the phone book under HMP Slade!

InsideInsurance

All of the above are highly likely to find HMRC crawling over your books with heavy fines, back tax and fees to pay if they can show any of this is a tax dodge and not legitimate business practice.

Why are you the director and shareholder when he is the revenue generator? What role are you actually playing in the company to justify your position and income?

All of this will be challenged and you will have to evidence that you and your daughter are actually working for the company and being paid a reasonable salary for the hours you are doing given your experience in the field of IT or whatever you're doing for him.

Contracting using a Ltd gives plenty of legitimate methods of mitigating your tax liabilities. Dont paint a big red target on your ar§e for HMRC by doing silly things like claiming the whole family are working 20 hours a week at £10 an hour doing admin or such

silent_meow

My husbands ex wife ran up considerable debt when they were married and once she could no longer get any credit in her own name, she took out credit in his name, he ended up entering into an iva with her in order to try to save their house. This is the reason he doesn't want to be a director until the iva is finished, in around 7 months. The money we want to pay his daughter is to put aside to pay for her university fees when she is 18, and then continue to pay her a wage when she is there for living expenses. We don't want her coming out with 50k debt. The reason we want to keep it away from her is because we don't want her mother knowing details about our finances because she is very irresponsible with money and would rather she was left in the dark. Btw, she is paid additionally for maintenance.

Ok, I realised before it would look dodgy to pay into my husband's, her father's, account, I'm just trying to find a solution here...

MoneyMission2015

Could your husband set up a savings account or ISA for his daughter, in her name & pay the money in to that account? If you're only doing it to save money for her university fees rather than to be accessed immediately then she can just access it when needed.

Mistral001

It is not a wage then that the daughter will be getting. Declaring it as a "wage" when it is in fact not a wage is deceit and amounts to tax evasion as far as I can see.

MoneyMission2015

Sorry, meant to add to my post. Can you pay your husband the salary, as his salary and then he can then pay money in to his daughters account for her to save for university.


Otherwise, as other posters have said, it does look very suspicious because you're paying all 3 of you just below the personal tax allowance and paying his daughter 'wages' when in fact she isn't actually working for the company. Don't get me wrong, I know it happens, but if HMRC did investigate you'd end up in a heap of trouble.

silent_meow

Thanks for your feed back. I admit it would be somewhat of a tax dodge, but it wasn't so we could line our own pockets. We wanted control of the money for when the time came, it would only be allowed to go on university fees and nothing else. We didn't want her being able to access it and have any opportunities to blow it and we certainly didn't want her mother knowing how much money was being put aside for her daughter because we know she would demand some of it and we didn't went to risk her telling HMRC, just to be spiteful. Sadly her daughters education isn't as important to her as new clothes, shoes and spa weekends. I think we will have to abandon the idea of putting 'wages' aside this way, I think it would be to obvious, I'm sure we'll come up with another solution. Thanks for the advice.

InsideInsurance

It doesnt matter who's account money goes to, its who is legally considered to be earning it. If he wants to give his daughter 10k a year then he is free to do so but that should be coming out of his own money and not the company.

Paying her a salary when she is doing no work is illegal and HMRC are very aware of these types of "arrangements" making you very easy prey when the press are saying how bad HMRC are being at catching tax dodgers.

zygurat789

silent_meow wrote: »

My husband and I have recently set up a limited company and bank account for his contracts to get paid into, he's contracting in IT and the money is pretty consistent. The company, shares, and business account are all in my name as director and sole share holder. I'll be paying him as an employee and myself a wage of £10k a year each. His daughter is 15, as as far as I understand, she can be paid a wage of £10k also. My question is, can this wage be paid directly into her father's bank account on her behalf?

Now we have disposed of the daughter's wages, What work do you do for the company? Is it worth your salary and would another person be paid the same for the same work? If not then you are in the same situation as your step daughter.
Has no one ever mentioned dividends to you?