Register as an employer to save money

Dazed_and_C0nfused

skintandsad said:

Grumpy_chap said:

skintandsad said:

He is a sole trader, not a Ltd company. 

Yes, I understood that.  But then you went on to comment about several points as a company so I understood the proposal was to change from Sole Trader to Ltd Co.
I understand that the constraints on paying a spouse that I referred to above in respect to Employment Allowance also apply for Sole Trader.

skintandsad said:

I only earn £112 per week 

skintandsad said:

The accountant said I could draw £112 without registering
I am not registered as self employed

On what basis did the Accountant determine you did not need to register as self employed?
£112 per week is £5.8k per year.  Far in excess of the threshold for registering:

https://www.gov.uk/become-sole-trader/register-sole-trader

You must register as a sole trader if you:

• earn more than £1,000 in a tax year (from 6 April to 5 April)

1) hubby will stay as sole trader
2) he pays me a small wage to do his books and other stuff.  He is not registered as an employer as I earn only a small wage, although he does employ me so I’m not self employed.  I earn below the amount needed for Ni (employer/ee) and tax

Am I doing this wrong?  It’s never been raised as an issue by HMRC or the accountant?

You may have been correct at some point in the past but he should now be registered as an employer as the limit for that has reduced fairly significantly, as per the link @Dead_keen put in their post.

skintandsad

Dazed_and_C0nfused said:

skintandsad said:

Grumpy_chap said:

skintandsad said:

He is a sole trader, not a Ltd company. 

Yes, I understood that.  But then you went on to comment about several points as a company so I understood the proposal was to change from Sole Trader to Ltd Co.
I understand that the constraints on paying a spouse that I referred to above in respect to Employment Allowance also apply for Sole Trader.

skintandsad said:

I only earn £112 per week 

skintandsad said:

The accountant said I could draw £112 without registering
I am not registered as self employed

On what basis did the Accountant determine you did not need to register as self employed?
£112 per week is £5.8k per year.  Far in excess of the threshold for registering:

https://www.gov.uk/become-sole-trader/register-sole-trader

You must register as a sole trader if you:

• earn more than £1,000 in a tax year (from 6 April to 5 April)

1) hubby will stay as sole trader
2) he pays me a small wage to do his books and other stuff.  He is not registered as an employer as I earn only a small wage, although he does employ me so I’m not self employed.  I earn below the amount needed for Ni (employer/ee) and tax

Am I doing this wrong?  It’s never been raised as an issue by HMRC or the accountant?

You may have been correct at some point in the past but he should now be registered as an employer as the limit for that has reduced fairly significantly, as per the link @Dead_keen put in their post.

Thank you.  I am bemused as to why the accountant hasn’t pointed this out to me!  I knew there were changes but at our last meeting to sign off the accounts he told us we could continue as previously (early May 2025).

I think I need to book a meeting 🙄 

Thanks all 

Grumpy_chap

It might also be worth checking with the Accountant the optimum amount of pay (possibly a bit more than £112 per week) to balance NI costs (employer and employee) against the value of accruing NI credits towards state pension.
I assume you do not have any other employment but you may still accrue NI credits even if the salary remains at the current level, for example if via caring duties.

skintandsad

Grumpy_chap said:

It might also be worth checking with the Accountant the optimum amount of pay (possibly a bit more than £112 per week) to balance NI costs (employer and employee) against the value of accruing NI credits towards state pension.
I assume you do not have any other employment but you may still accrue NI credits even if the salary remains at the current level, for example if via caring duties.

To be fair, that’s where my thinking started.  I am only a couple or three years short of full pension, so wanted to work out the best (cheapest) way of accruing pension years.  I am  definitely underpaid, but nobody else would do my job that often involves calls at 3am asking for a What3Words address to a loading bay! (His lordship works nights).
If I can save hubby tax as well, that’s a bonus.

I don’t have any other jobs.  I could look into carers credits for my mum, but would rather do it via work as I can’t guarantee being able to look after her for 20 hours every week.

Thanks for your help 🙃

Grumpy_chap

It is also worth checking whether you have prior years of NI credits available if you took any breaks for childcare and / or if you have any years that you can make up with voluntary contributions for a low input payment.