Could my wife provide us services on a self employed basis and put all her earnings into a pension

michaels

Suppose my wife provided and billed £150 of services to our household on a self employed basis every week (10 hours of cooking and cleaning for example)

Could she then put all her annual earnings (about £8k) into a pension and receive tax relief of 2K on top?

Her current pension pot is small so she will not pay any tax on drawdown.

Thinking out loud following some of the discussion about self employed NI contributions.

xylophone

Suppose my wife provided and billed £150 of services to our household on a self employed basis every week (10 hours of cooking and cleaning for example)

She is doing the cooking and cleaning in her own home (providing a service to herself?

Don't think that will wash.....no pun intended.....

Even though she has no relevant earnings, she could still pay £2880 per annum into a pension and receive tax relief of £720.

Has she checked her state pension forecast?

https://www.gov.uk/check-state-pension

What exactly does it say?

michaels

xylophone said:

Suppose my wife provided and billed £150 of services to our household on a self employed basis every week (10 hours of cooking and cleaning for example)

She is doing the cooking and cleaning in her own home (providing a service to herself?

Don't think that will wash.....no pun intended.....

Even though she has no relevant earnings, she could still pay £2880 per annum into a pension and receive tax relief of £720.

Has she checked her state pension forecast?

https://www.gov.uk/check-state-pension

What exactly does it say?

We do the 2880 thing already and she has full state pension entitlement.  I was wondering if there was a way to go above £2880 using self employment as a route - you mention 'in her own home' - are there rules specific to this?  How about dropping me to work and picking me up - outside the home....

AnotherJoe

Maybe if you could find another couple in the same boat you could swap wives

michaels

AnotherJoe said:

Maybe if you could find another couple in the same boat you could swap wives

What if the other wife turned out to be better at it (cleaning) than my wife?

Albermarle

Then there might be a divorce and then you would be skint !

shinytop

michaels said:

Suppose my wife provided and billed £150 of services to our household on a self employed basis every week (10 hours of cooking and cleaning for example)

Could she then put all her annual earnings (about £8k) into a pension and receive tax relief of 2K on top?

Her current pension pot is small so she will not pay any tax on drawdown.

Thinking out loud following some of the discussion about self employed NI contributions.

I think, like some other self employed your roles, your wife could end up being deemed to be employed by you.  Then you'd have to give her paid holidays, a pension, pay NI, etc.  And if you fire her, she could sue for wrongful dismissal.  Be very careful ...

michaels

shinytop said:

michaels said:

Suppose my wife provided and billed £150 of services to our household on a self employed basis every week (10 hours of cooking and cleaning for example)

Could she then put all her annual earnings (about £8k) into a pension and receive tax relief of 2K on top?

Her current pension pot is small so she will not pay any tax on drawdown.

Thinking out loud following some of the discussion about self employed NI contributions.

I think, like some other self employed your roles, your wife could end up being deemed to be employed by you.  Then you'd have to give her paid holidays, a pension, pay NI, etc.  And if you fire her, she could sue for wrongful dismissal.  Be very careful ...

I did run it through a self employment / IR35 checker on the HMRC website and it seemed to be OK, she would pay for her own materials, could send a substitute if need be and take on other cleaning work if anyone offered it to her.....

Is there some catch all rule about a job not being a real one and only down for tax or benefits reasons?

Joey_Soap

michaels said:

shinytop said:

michaels said:

Suppose my wife provided and billed £150 of services to our household on a self employed basis every week (10 hours of cooking and cleaning for example)

Could she then put all her annual earnings (about £8k) into a pension and receive tax relief of 2K on top?

Her current pension pot is small so she will not pay any tax on drawdown.

Thinking out loud following some of the discussion about self employed NI contributions.

I think, like some other self employed your roles, your wife could end up being deemed to be employed by you.  Then you'd have to give her paid holidays, a pension, pay NI, etc.  And if you fire her, she could sue for wrongful dismissal.  Be very careful ...

I did run it through a self employment / IR35 checker on the HMRC website and it seemed to be OK, she would pay for her own materials, could send a substitute if need be and take on other cleaning work if anyone offered it to her.....

Is there some catch all rule about a job not being a real one and only down for tax or benefits reasons?

Yes, it's called GAAR.

Silvertabby

Can't be that simple.  Otherwise, those of us who retired early and need to pay voluntary Class 3 NI contributions to top up our State pensions could claim to be 'self employed housekeepers' - and pay Class 2.

jonnygee2

Suppose my wife provided and billed £150 of services to our household on a self employed basis every week (10 hours of cooking and cleaning for example)
Could she then put all her annual earnings (about £8k) into a pension and receive tax relief of 2K on top?

This is clearly an abuse of the tax system. You can't pay yourself for cleaning your own house!

Nice try, but I think you'd end up in some trouble.