Self employed - wife wants to do the same

hubb

I am self employed, work from home in my office selling media online. I do my accounts and everything is simple. My wife recently left her job and decided she wants to work from home producing artwork. Initially I suggested her to join me under one income but thinking about it, she would lose her tax relief threshold if she produced work under my name. Therefore, I think it would be a better option for her to work under her own name so she can not be taxed on any earnings under the lowest threshold. As I am not earning very much (around 13K), just about hitting the tax threshold we need all the breaks we can get regarding money.

So her going under her own name (she isn't claiming any benefits/no dependents) seems the best option and all earnings made by her won't be taxed.

is there anything I am missing that some more experienced self employed people are aware of ?

Thanks.

antrobus

hubb wrote: »

I am self employed, work from home in my office selling media online. I do my accounts and everything is simple. My wife recently left her job and decided she wants to work from home producing artwork. Initially I suggested her to join me under one income but thinking about it, she would lose her tax relief threshold if she produced work under my name. Therefore, I think it would be a better option for her to work under her own name so she can not be taxed on any earnings under the lowest threshold. As I am not earning very much (around 13K), just about hitting the tax threshold we need all the breaks we can get regarding money.

So her going under her own name (she isn't claiming any benefits/no dependents) seems the best option and all earnings made by her won't be taxed.

is there anything I am missing that some more experienced self employed people are aware of ?

Thanks.

Your wife can trade under her own name.

You both could trade together as partners.

Either or both of you could trade through one or more LTDs.

Your wife could indeed join you "under one income"; she would become your employee.

Kayalana99

What we have done is create a partnership, at the end of the year the profit is spilt between the two of us. So it isn't 'one income' as we declare it for tax seperatly, but it is from the same business.

Another way of doing it would be to have her as an employee and pay her a set wage, but I think the above is the best way assuming you don't mind her having a controlling interest in the business.