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

pleasedelete

of course it is to line your own pockets- or deprive the taxpayer.

Also avoids your OH paying child maintenance if he has no/lower income?

However it is not illegal if you can prove that you and his daughter do enough work for the company to justify the salary.

You will need written permission from her school for her to work (or the county in some places). They can refuse.You will need employee insurance etc

£10,000 is £833.33 a month (she will pay some NI which takes it to about £813 if I recall). That is approx 125 hours based on a typical un skilled 15 year old wage? How will she manage to work 30 hours a week and study?

The same for you- does the company need so much labour per week?

As soon as you pay the money to HER in HER bank account she can do what she wants with it. You can never have any of it go back into your bank account and if investigated she may be required to account for it (so no cash withdrawals) . She of course becomes explicit in your tax avoidance and she MUST understand what she is being asked to do.

To add I employed a child of mine from 16 . We documented every hour that she worked. She had clear role and evidenced the salary benchmarked to similar roles for people of similar experience in our locality. She was the only employee.

Annisele

From OP's other post, I don't think tax mitigation is the only issue. It looks as though one of the reasons (possibly the main reason) for the company structure is to try to avoid paying her husband's creditors, with child maintenance secondary.

OP - does the insolvency practitioner involved know about your husband's change in circumstances (i.e. his new job working for your company)? If they do, all well - but if not you could both end up in some difficulties down the line.

Do you have any accountant? Preparing accounts for a limited company isn't rocket science, but there's more to it than accounts for a sole trader. When I ran a limited company, I used to find it much easier to just pay a proper accountant than try to learn it all myself. That also means you have advice from somebody who knows your circumstances. And accountants usually end up reducing your tax bill one way or another - win win!

Mistral001

Annisele wrote: »

From OP's other post, I don't think tax mitigation is the only issue. It looks as though one of the reasons (possibly the main reason) for the company structure is to try to avoid paying her husband's creditors, with child maintenance secondary.

OP - does the insolvency practitioner involved know about your husband's change in circumstances (i.e. his new job working for your company)? If they do, all well - but if not you could both end up in some difficulties down the line.

Do you have any accountant? Preparing accounts for a limited company isn't rocket science, but there's more to it than accounts for a sole trader. When I ran a limited company, I used to find it much easier to just pay a proper accountant than try to learn it all myself. That also means you have advice from somebody who knows your circumstances. And accountants usually end up reducing your tax bill one way or another - win win!

I agree, see an accountant. Unfortunately some of what the OP is proposing is as far as I can see not just tax mitigation but is tax evasion which is illegal and any reputable accountant would probably show the OP the door if they wanted to go down that path.

Pennywise

silent_meow wrote: »

The company, shares, and business account are all in my name as director and sole share holder.

Have you checked that you aren't caught by IR35? If IR35 applies, none of your proposals would have any effect as husband would be held to have a "deemed salary" on which tax and NIC would be due. Your/daughter's wage and shareholding would effectively be ignored. You really need to be engaging an accountant.

pleasedelete

isnt there something that for a child under 16 who receives dividends from a company owned by a parent they are taxed as if it is the parents income? Could this also be seen to be trying to avoid that?

Ebe_Scrooge

Annisele wrote: »

Do you have any accountant? Preparing accounts for a limited company isn't rocket science, but there's more to it than accounts for a sole trader. When I ran a limited company, I used to find it much easier to just pay a proper accountant than try to learn it all myself. That also means you have advice from somebody who knows your circumstances. And accountants usually end up reducing your tax bill one way or another - win win!

This. I run a Ltd. Co., and when I first started it up I went through the various ideas of having my wife & kids as employees ( and all the other various "legal" ways of reducing tax liability ). The gist of the advice from my accountant was "Yes you can, and you'll probably get away with it. But the tax-man may come knocking on your door asking for proof that they work for you, what they do, what hours they work, what value they add to the company, etc. etc." For genuine employees this obviously doesn't cause an issue. But for the sake of a relatively small gain it's not worth it. Just be honest with the tax-man, ideally via an accountant, and he'll just rubber-stamp your returns and there's nothing further to worry about. You really don't want to be messing about with HMRC.