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

michaels

NedS said:

As mentioned previously (I believe), to be considered genuinely self employed by HMRC, your wife must be carrying out a trade or profession, and being a housewife isn't a recognised trade or profession by HMRC.

p00hsticks said:

michaels said:

NedS said:

As mentioned previously (I believe), to be considered genuinely self employed by HMRC, your wife must be carrying out a trade or profession, and being a housewife isn't a recognised trade or profession by HMRC.

But being a cleaning operative or a food preparation operative or a laundry operative or an administrator or a child minder or a taxi driver is?

Why are we skirting around the obvious here ? These are mainly minimum wage jobs.

I've never personally seen Mrs michaels, but is she so unattractive (or unforthcoming) that bedroom services would not pay better ?

That would certainly cover the professional bit....

p00hsticks

michaels said:

NedS said:

As mentioned previously (I believe), to be considered genuinely self employed by HMRC, your wife must be carrying out a trade or profession, and being a housewife isn't a recognised trade or profession by HMRC.

p00hsticks said:

michaels said:

NedS said:

As mentioned previously (I believe), to be considered genuinely self employed by HMRC, your wife must be carrying out a trade or profession, and being a housewife isn't a recognised trade or profession by HMRC.

But being a cleaning operative or a food preparation operative or a laundry operative or an administrator or a child minder or a taxi driver is?

Why are we skirting around the obvious here ? These are mainly minimum wage jobs.

I've never personally seen Mrs michaels, but is she so unattractive (or unforthcoming) that bedroom services would not pay better ?

That would certainly cover the professional bit....

But would she be prepared to satisfy the HMRC self-employment / IR35 critieria of supplying a substitute if she's not available and/or taking up offers from other clients ? ;-)

michaels

p00hsticks said:

michaels said:

NedS said:

As mentioned previously (I believe), to be considered genuinely self employed by HMRC, your wife must be carrying out a trade or profession, and being a housewife isn't a recognised trade or profession by HMRC.

p00hsticks said:

michaels said:

NedS said:

As mentioned previously (I believe), to be considered genuinely self employed by HMRC, your wife must be carrying out a trade or profession, and being a housewife isn't a recognised trade or profession by HMRC.

But being a cleaning operative or a food preparation operative or a laundry operative or an administrator or a child minder or a taxi driver is?

Why are we skirting around the obvious here ? These are mainly minimum wage jobs.

I've never personally seen Mrs michaels, but is she so unattractive (or unforthcoming) that bedroom services would not pay better ?

That would certainly cover the professional bit....

But would she be prepared to satisfy the HMRC self-employment / IR35 critieria of supplying a substitute if she's not available and/or taking up offers from other clients ? ;-)

She might see that as a win-win...

Grumpy_chap

If I could pay my wife for "services" in the home, I might have to drop the prefix from my username. 😉

jamesd

crv1963 said:
What I'd like to see although it is unlikely- that a spouse could pay into their spouse pension pot just as you can transfer as much money as you like without penalty to your spouse bank account. We're in the position of me paying into Mrs CRV SIPP almost 80% of her take home pay from my higher income. By the time we get to take it we plan on her drawing just under the personal allowance.

That's already permitted for contributions and anyone can do it. The limits and reliefs are those of the recipient. For transfers it's unlikely except on divorce because it would further increase the gain for higher and top rate tax payers.

Ditzy_Mitzy

The short answer to this is 'no'.  In terms of a SIPP there are two methods of making contributions: personal and employer.  Only personal contributions, i.e. your wife's own money, are eligible for tax relief as they are assumed to have been taxed at source.  Employer contributions are made gross.  
In such a situation you would be 'paying' her using money that you've already been taxed on and, if you then put this money into her SIPP as an 'employer', you won't get tax relief on it. In addition, she'll then only get 1/4 of it back tax free and will pay income tax on the remaining 3/4s taken as income.  That's assuming she goes over her personal allowance in the tax year, which she might if she's getting state pension or other income.  
She'll also have to fill out a self-employed tax return for the year and pay on any 'earnings' over the personal allowance. 
Why don't you just forget the charade, give her the money and allow her to claim tax relief on it as a personal contribution?  Beware, however, that she needs to earn above the lower threshold in order to get the standard contribution allowance.  

michaels

Ditzy_Mitzy said:

The short answer to this is 'no'.  In terms of a SIPP there are two methods of making contributions: personal and employer.  Only personal contributions, i.e. your wife's own money, are eligible for tax relief as they are assumed to have been taxed at source.  Employer contributions are made gross.  
In such a situation you would be 'paying' her using money that you've already been taxed on and, if you then put this money into her SIPP as an 'employer', you won't get tax relief on it. In addition, she'll then only get 1/4 of it back tax free and will pay income tax on the remaining 3/4s taken as income.  That's assuming she goes over her personal allowance in the tax year, which she might if she's getting state pension or other income.  
She'll also have to fill out a self-employed tax return for the year and pay on any 'earnings' over the personal allowance. 
Why don't you just forget the charade, give her the money and allow her to claim tax relief on it as a personal contribution?  Beware, however, that she needs to earn above the lower threshold in order to get the standard contribution allowance.  

She is not earning anything else and won't go over the allowance in retirement and she would not want to earn enough now to pay tax or ni when self employed (she already has full SP entitlement).  We share all our money so there is no giving to her or my income.  From our money we already put 2880 into her pension but would like to increase her pension further.  Currently we share the income earning and house hold duties with me doing the earning and some of the chores and her doing the remainder of the chores.  If we wanted to employ someone to do the chores that person would treat our payments as income.

OldBeanz

michaels said:

Ditzy_Mitzy said:

The short answer to this is 'no'.  In terms of a SIPP there are two methods of making contributions: personal and employer.  Only personal contributions, i.e. your wife's own money, are eligible for tax relief as they are assumed to have been taxed at source.  Employer contributions are made gross.  
In such a situation you would be 'paying' her using money that you've already been taxed on and, if you then put this money into her SIPP as an 'employer', you won't get tax relief on it. In addition, she'll then only get 1/4 of it back tax free and will pay income tax on the remaining 3/4s taken as income.  That's assuming she goes over her personal allowance in the tax year, which she might if she's getting state pension or other income.  
She'll also have to fill out a self-employed tax return for the year and pay on any 'earnings' over the personal allowance. 
Why don't you just forget the charade, give her the money and allow her to claim tax relief on it as a personal contribution?  Beware, however, that she needs to earn above the lower threshold in order to get the standard contribution allowance.  

She is not earning anything else and won't go over the allowance in retirement and she would not want to earn enough now to pay tax or ni when self employed (she already has full SP entitlement).  We share all our money so there is no giving to her or my income.  From our money we already put 2880 into her pension but would like to increase her pension further.  Currently we share the income earning and house hold duties with me doing the earning and some of the chores and her doing the remainder of the chores.  If we wanted to employ someone to do the chores that person would treat our payments as income.

One thing your wife would need to do is register as self employed. There is an HMRC online tool to help determine whether your wife would be considered as being self employed. The outcome may come as a disappointment, if not a surprise.