Sole trader paying wife

Dazed_and_C0nfused

sultan123 said:

Dazed_and_C0nfused said:

Or getting an accountant.

What employee wants to be paid annually!!

But theres nothing wrong in paying annually if I want surely

What about your employee?

The more you post the more it comes as across as a tax evasion situation not an employer/employee relationship.

People who work are usually paid at least once a month.

Might be worth you reading up on NMW regulations.

https://www.gov.uk/national-minimum-wage/employers-and-the-minimum-wage

Grumpy_chap

sultan123 said:

But theres nothing wrong in paying annually if I want surely

That has been explained above:

Dazed_and_C0nfused said:

as soon as you pay more than £120/week you have to have a PAYE scheme even if the total for the tax year was less than £6.2k

Also, based upon your OP, you have not yet employed your wife:

sultan123 said:

Can anyone tell me max a sole trader can pay his wife for helping with weekly work for business. What is the max in a tax year? Wife has no other work and is unemployed so this would be only income

I read that as a potential job for which you may employ your wife.
If your wife joins the business on, say, Monday 28th March to perform task X at hourly market rate £Y for Z hours per week and that calculation comes out to £120 per week and you pay her weekly, then the first salary would be paid on Friday 1st April.
Only one pay-day remains in this tax year.

Unless, as the employer, your sole-trader business is proposing to pay a "golden hello" of some £6k with the first weekly pay packet.  That would be unusual and still require that a payroll scheme is registered as the salary in the first week would be far in excess of £120 per week.

You cannot retrospectively employ your wife now with a start date of 6th April 2021. 


You have also glossed over my previous comments that, in order to be employed by your business and draw a salary, your wife actually has to perform some work task for the business and the rate has to be at reasonable market rate (or not above) for the task.  You can't simply employ your wife as a cleaner for 1 hour per week and pay £120 per hour as that would not stand up to any scrutiny.


Taking this thread and your previous thread together, you are fortunate to have a high level of PAYE income (£88k?) plus your sole-trader income on top.  That would really benefit from the input from an Accountant to give specific advice to manage tax efficiency.  It is quite possible, with the two sources of income combined, that you will need to submit SA return and this would also be easier with the support of an Accountant.

https://forums.moneysavingexpert.com/discussion/6334450/net-salary-difference/p1

Dazed_and_C0nfused

Taking this thread and your previous thread together, you are fortunate to have a high level of PAYE income (£88k?) plus your sole-trader income on top. That would really benefit from the input from an Accountant to give specific advice to manage tax efficiency. It is quite possible, with the two sources of income combined, that you will need to submit SA return and this would also be easier with the support of an Accountant.

This ^^^^ 100%

Although surely the op must be completing Self Assessment returns if they have a business which can afford to pay £6k in employee costs.

Grumpy_chap

Dazed_and_C0nfused said:

Although surely the op must be completing Self Assessment returns if they have a business which can afford to pay £6k in employee costs.

Yes, of course.
I was thinking of the £100k trigger.
But the OP must be registered as a sole-trader and submit SA in any case as well outside the limits of the Trading Allowance.

The OP really needs an Accountant.
Pension contributions might be an alternative consideration to employing his wife if the objective of the question is all about minimising tax liabilities.

Jeremy535897

sultan123 said:

Dazed_and_C0nfused said:

Or getting an accountant.

What employee wants to be paid annually!!

But theres nothing wrong in paying annually if I want surely

Remember that the payment has to be wholly and exclusively for the purpose of your sole trade to qualify for a deduction. An annual payment in arrears does not look commercial.