CIS or self employed

dizzyf

Hi! My husband is employed (PAYE) and self employed (self assessment) and pays tax higher rate. I'm looking for advice on best way for my tax allowance (i am not working anywhere) to reduce his. Can I a) put myself as self employed on CIS and claim half of his work as mine b) become a partnership and use my allowance or is there another way that may benefit. Alll suggestions greatly appreciated before 4th April please!!!;)

GARDINER

Nothing you suggest is legal. Do you however provide secretarial duties for your husband? In that case he could pay you and claim a deduction in his accounts. Your tax allowance would have to cover the wages and you would also have to keep the wages below the National Insurance limits or else he would need to open a PAYE scheme with HMRC and operate PAYE.

Pennywise

GARDINER wrote: »

Your tax allowance would have to cover the wages and you would also have to keep the wages below the National Insurance limits or else he would need to open a PAYE scheme with HMRC and operate PAYE.

I disagree. Why is it a bad thing for wages to be over the NIC threshold? Above this amount, she would gain "credits" for state benefits at no cost to herself at all, as long as the wages were below the annual personal allowance. Registering as an employer and filling in an annual return is not a major problem and she would probably be very thankful in later years when she is entitled to her own state benefits.

My advice would be to pay just under the annual personal allowance, of £5,225 for 07/8. On this there would be no tax nor NIC so no complicated calculations. Obviously, as long as the work done at a reasonable hourly rate would come to around this figure.

GARDINER

''My advice would be to pay just under the annual personal allowance, of £5,225 for 07/8. On this there would be no tax nor NIC so no complicated calculations. Obviously, as long as the work done at a reasonable hourly rate would come to around this figure.''

Is that not what I suggested?

Dizzyf is trying to save money - any nic 'credits' would have to be paid for by her husband -they dont come for free unless on certain benefits.

dizzyf

Sorry perhaps i didn't make myself clear.
My husband works for an employer (salary around £58k)
He also works for himself, part time (around £28k)
I do all of secretarial duties, sales calls (my own car), and estimates on site. When he first started his self employment, as it was only a small concern, he went on CIS, as this was more straightforward. (Obviously as his wife i spend the money whoever it's paid too!) When he filled in Self asessment for 2006/07, he decided not to pay me any salry or claim any mileage costs. Based on these figures, he has obviously been hammered for tax.
I wondered which is the best way forward for us. Should I register as self employed, and bill husband for my services? I'm not trying anything illegal, I do all the work (from home) and don't claim anything!
Thanks in advance of any advice!