Working for partner NO PAYSLIPS

JMW77

I need some up to date advice, i work for any partner keeping under the tax bracket ,so in effect paid cash with no monthly records but the accountant deals with it yearly so its all official except no payslips.
I have just applied for the 30 hours free childcare but they want to see proof of earnings which i don't have as we have always just withdrawn my wages out with my partners .So now i am faced with a £300 bill for childcare a month which is about 70% of what i earn yet i am entitled to the extra childcare as most people are now .

We were under the impression as long as my partner only employed me he didn't need to do the PAYE and if i only worked part time this was ok assuming my wages stay below the tax limit .

I can't prove my wages although as far as i'm aware this is ok ,have the rules changed?

sheramber

If you are paid enough to be eligible for the free child care you should have a PAYE record.

https://www.gov.uk/paye-for-employers

You don’t need to register for PAYE if none of your employees are paid £113 or more a week, get expenses and benefits, have another job or get a pension. However, you must keep payroll records.

https://childcare-support.tax.service.gov.uk/moreinfopar/2/?returnURL=%2Fccp%2Fsignup%2Fentrypage



Tax-Free Childcare
30 hours free childcare

2. 30 hours free childcare
Eligibility

All 3 and 4-year-olds in England can get 570 hours of free early education or childcare over 38 weeks of the year (or fewer hours over more weeks). Some 2-year-olds are also eligible. 3 and 4-year-olds may also be entitled to an additional 570 hours of free childcare over 38 weeks of the year, a total of 1,140 hours. Its possible to stretch your entitlement by taking fewer hours over more weeks of the year. Use the childcare calculator to see what childcare support you could get.
When can you apply?

The date you can apply depends on your child's birthday. Your child is eligible:

from the term following their 3rd birthday until they reach compulsory school age
if they usually live with you – you do not have to be their parent however foster carers are exempt

Child's birthday When you can claim
1 January to 31 March The beginning of the summer term on or after 1 April
1 April to 31 August The beginning of the autumn term on or after 1 September
1 September to 31 December The beginning of the spring term on or after 1 January
Example

Your child was born on 15 February 2013 and will turn 3 on 15 February 2016. You can get free childcare from 1 April 2016. The free early education and childcare entitlements for 3 and 4-year-olds can only be acquired from an approved childcare provider who is on the early years register.

To be eligible, you (and your partner if you have one), must either:

each expect to earn at least £120 a week or work more than 16 hours at the National Living Wage (unless you became self-employed less than 12 months ago), or each expect to earn at least £113 a week or work more than 16 hours at the National Minimum Wage (unless you became self-employed less than 12 months ago)
each expect to earn at least £61.92 a week if you're under 18, £84.80 a week if you're aged 18-20 or £52.80 a week if you're an apprentice (either under 19 or in the first year of your apprenticeship)

You, and your partner, must also both:

live in England
expect to have income of less than £100,000 each a year

Pennywise

As Sheramber rightly says it's not the tax threshold which determines it. The threshold for running a PAYE scheme is £113 per week, which is far less than the tax threshold. If you've been paid more than £113 per week, then a PAYE scheme should have been operated and submissions made to HMRC every time a payment was made to you.

trailingspouse

So you've arranged things so that you're 'under the tax bracket' - but now you want to be eligible for 30 hours free childcare.

When you say 'the accountant deals with it' what do you mean exactly? Do they put your money through RTI separately from your partners, and pay you a separate amount? Or is it all paid under his name in one lump sum? Do you get a P60 at the end of the tax year?

Are you actually employed? I mean, do you have a contract, does your partner have Employer's Liability insurance (which is a legal requirement), do you have a job description? Or does your partner just let you have a bit of money when you've done a bit of work.

It all sounds a bit odd to me.

mr_munchem

trailingspouse wrote: »

So you've arranged things so that you're 'under the tax bracket' - but now you want to be eligible for 30 hours free childcare.

When you say 'the accountant deals with it' what do you mean exactly? Do they put your money through RTI separately from your partners, and pay you a separate amount? Or is it all paid under his name in one lump sum? Do you get a P60 at the end of the tax year?

Are you actually employed? I mean, do you have a contract, does your partner have Employer's Liability insurance (which is a legal requirement), do you have a job description? Or does your partner just let you have a bit of money when you've done a bit of work.

It all sounds a bit odd to me.

My thoughts exactly.

If you're earning £120 (i.e. eligible for the free childcare), then your partner has to run a PAYE scheme.

JMW77

I earn about £120 a week and so I am eligible for the childcare , and yes I do plenty of work for that .
I worked full time for the business before I had children we were then both self employed but when I had children it was only possible to work part time .I think 15 years ago it was fine to have this arrangement but it looks like now if I earn slightly less I become ineligible for the childcare .If I earn over £120 we have set up the PAYE to get it legal ?

Pennywise

JMW77 wrote: »

If I earn over £120 we have set up the PAYE to get it legal ?

No, as said above, the threshold is £113 per week for compulsory setting up a PAYE scheme and making submissions to HMRC of the amounts paid every pay day.

badmemory

I suggest you speak to your accountant. If it is all going through as if your partner is earning it then you are (well he is) paying a lot too much tax.

chrismac1

There should be payslips in my view whether or not there is a PAYE scheme in existence. My general advice - I am an accountant - is to put through enough to deliver a credit to State Pension, which is something which does not feature in the thread so far but is worth £700 or £800.

You need £486 per month to get the State Pension credit. It seems a slam dunk to me to set up a payroll scheme for this, get the State Pension credit and have nothing to fear from HMRC enquiry - whereas doing it the current way there is always some risk especially if anyone else knows about this arrangement.

00ec25

JMW77 wrote: »

.If I earn over £120 we have set up the PAYE to get it legal ?

no, if you earn over £113 per week

also it appears you and your husband need to talk to the accountant to find out what he is doing, as he may have made some erroneous assumptions and be treating the payments incorrectly, it seems you simply don't know

JMW77

So if i earn less than £113 a week it ok ?
Work is very quiet at the moments drop in wages would make sense especially if it makes my partners books legal.

I have lost this terms 30 hours childcare so will have to pay the whole term now as the deadline passed .
There will only be one more term so its easier just to pay it than start the whole PAYE system for the sake of Less than £10 a month.