UK Paying Spouse Wage

[danjswade]

I have a client who is self employed. His wife does general PA activities for him (as a good wife does). She doesn't work. He was wondering if he could pay her a wage (fair to the work she does) and then deduct this from his yearly tax bill.

Of course, she would have to register as self employed in order to accommodate this.

Is there anything else that should be taken in to account when going down this route?

 

[Neeraj01]

If she is not a member of the LLC then one disadvantage of not having her on payroll be no stated income. You will not be taxed twice since it is payroll expense for your LLC. But you may be responsible for your share of unemployment tax, Social security tax, workers comp, state and country employment tax etc, for this employee.

 

[Truemanbrown]

You may find this blog, employing your spouse, relevant.

 

[Tungsten]

I am no accountant, but would it not be worth the chap forming a Ltd company and running a payroll for two people? Then he could extract 2 x £11,000 per year zero tax bar NI.

 

[Julia Satin]

I have a client who is self employed. His wife does general PA activities for him (as a good wife does). She doesn't work. He was wondering if he could pay her a wage (fair to the work she does) and then deduct this from his yearly tax bill.

Of course, she would have to register as self employed in order to accommodate this.

Is there anything else that should be taken in to account when going down this route?

There is no need for her to register as self employed in order to be on payroll of her husband's business. However, unless the wages are below the threshold he will be required to pay income tax as well as NI on her wages monthly or weekly depending on frequency with which the wages are paid.
Wages as costs to the business are deductible for income tax purposes.