To consider this a job and receive payment/tax credit

(42 Posts)
morethanpotatoprints Mon 29-Apr-13 15:43:15

Ok, my dh has a small business and I am sahm.
During my week I must clock approx 24 hours doing business related work to assist him. My problem is that yes he could do these things himself, but the time I save him he can use productively in the business himself and in fairness he does.
He draws a wage from the business but doesn't take any dividends, the business could stand me taking 24 hrs pay at NMW. This wage would entitle me to more tax credits, which would definitely come in useful.

My role includes: Meet and greet, issuing permits, making hot beverages, laundry/dry cleaning trips (only business suits here), taking messages, keeping diary. Advising potential clients/customers, liaising with suppliers, customers, providers etc. Bookkeeping/ banking and post. Photocopying, filing,.Entertaining clients and colleagues is also quite often done. Lots more that I can't really think of now.

So is this the job of a PA, is that what they do, sort of assist in the day to day running of the business? If so I am due 20 years back pay grin

Viviennemary Wed 01-May-13 14:06:08

Thanks for explaining. It definitely would be an advantage tax wise because you'd each get the personal allowance before paying tax. I think the accountant should be able to help you with the tax credits side of things. It's a wonder anybody actually understands them. they are so complicated!

UterusUterusGhali Tue 30-Apr-13 22:53:05

Yes, you should do it. You're doing a job.

morethanpotatoprints Tue 30-Apr-13 22:16:06

Viviennemary

Its a bit of both really, it would be great financially to be able to meet criteria for new UC if it ever happens. But also, the cuts and past history along with being on here has made me realise you don't know what's round the corner. After 20 years of little employment, I don't think i'd be offered a job if I needed one tbh. This would be official employment and be good for cv if I ever needed a job outside of home. We would both take min wage, obviously he is able to work many more hours than me.

I haven't had time to speak to our accountant yet but will definitely ask her to put it in writing, even if its so I can come back and explain grin

The reason I don't want to job hunt outside of home is because with or without payment I enjoy helping dh with business and H.ed dd. This would be much harder working away from home.

For tax credits it will make no difference at all. You'll get to both use your personal allowances though, which will make you better off. I would worry about rules for UC when you actually get transferred to it.

Viviennemary Tue 30-Apr-13 21:49:24

I've tried to understand this but don't. Do you mean if you take a wage then your DH's wage will decrease. Or will it stay the same. Do you mean because the rules for UC are changing and require both partners to work or seek work in order to claim UC once they have children over a certain age. .

LittleBearPad Tue 30-Apr-13 21:07:08

Can you get the accountant to put her advice in writing. At least then you have it to refer to later.

janey68 Tue 30-Apr-13 16:40:17

Yes I agree- you need specialist advice, particularly regarding things like pensions which need long term projections and planning and where typically people tend to underestimate their needs ( not saying you are necessarily but that's the general trend!)
Sounds like you should definitely go for - apart from
Anything else it puts your skills on a more formalised basis should you ever wish to use them anywhere outside your husbands business

allmycats Tue 30-Apr-13 16:31:05

Go and talk to your accountant again, you should be maximising the usage of both your personal tax allowances and ensuring that both of you pay a national insurance stamp.

morethanpotatoprints Tue 30-Apr-13 12:19:10

Thank you all for your comments and will definitely speak to the accountant again.
She explained it to me and I understand at the time, then go away and couldn't explain it again to save my life.
The H.ed isn't really an issue as I am doing both atm just not getting any payment/ not officially employed. Neither specifically requires set hours and can be done whenever it suits.

ssd

Up until now we have left money in the business for things like pension, dc for uni etc, house repair (emergencies) holidays. Not that we have any (first last year). Obviously if we take it out as form of dividend for personal use it is taxable income then and treated as such. So we try not to take it out unless we really need it.

Janey Yes it is all work that needs doing, but it is a bit like creating a role, but the jobs have to be done. My dh does use the time I save him to do business related activities. This has helped him over the years to do things that otherwise get put to the bottom, missed, overlooked etc due to time restraints.

LittleBearPad Tue 30-Apr-13 08:36:08

If it's more about 'having a job' so that in future (should you need it) you'll have recent work experience on your CV then why do you need to do 24 hours work? I know this is the UC benchmark but this doesn't seem a major issue at the moment as it doesn't seem you'd get additional tax credits.

Could you be paid for ten hours (for example) so you have the role (and CV experience) then if the UC/TC rules change think again. Plus ten hours might look like it fits around HEd time too?

Llareggub Tue 30-Apr-13 08:17:42

I get where you are coming from. I second the suggestion to see an accountant.

FasterStronger Tue 30-Apr-13 08:12:19

Morethan, have you thought of going to see CAB?

I don't think the numbers add up but you need a specialist. Going on my figures 15k = 46.6 hours per week at minimum wage - which would not give you both enough hours for UC without you job seeking.

but you need expert advice, particularly because of the home schooling aspect.

ssd Tue 30-Apr-13 08:02:07

I'd say you should do it, in fact you should have been paying yourself instead of leaving the money in the business, you do the work so you should get paid.

I dont see why you feel the need to mention it to your sister, its not her business.

I think its a case of accepting reality rather than taking a moral stance.

ChunkyPickle Tue 30-Apr-13 08:01:34

Go to an accountant. They are experts in this kind of thing, and a good one will always save you at least their fee.

As a rule, I would have thought that it is better for two people to be paid half the wage, just because it means you're using two tax allowances, even before any kind of tax credits are taken into account.

janey68 Tue 30-Apr-13 07:40:46

Actually reading through again I'm a bit unclear about whether you are already doing this work 24 hours a week . If its already work which needs doing then its a job and there is no reason why you shouldn't be employed to do it and paid for it. But you also make it sound like your husband will drop hours as you up yours so its a little unclear. If its not so much work which needs doing, but more 'creating ' a job to try to maximise your situation re tax, then tax avoidance is something some people have a moral issue with but is entirely legal so you aren't doing anything wrong - as long as you don't judge anyone else for doing it!
However looking at the scale of the business and the figures you mention I am in agreement with others that it doesn't look wholly sustainable to be employing many people. I also don't understand the point about tax credits. But why not go for it if this is a new venture and will help utilise your skills.

janey68 Mon 29-Apr-13 23:50:48

Yes it's no different to a politician employing his wife.
I am a little confused though about the whole not wanting to be in work thing though, when this seems to be precisely what you do want. (Not that there's anything remotely wrong with working I hasten to add! Just seems a bit of a mixed message)

tabulahrasa Mon 29-Apr-13 23:34:20

But it's only sharing his wage if you think of it as sharing his wage - otherwise it's paying his employee first and seeing what's left over for him to take.

morethanpotatoprints Mon 29-Apr-13 23:26:03

ssd.

It shouldn't do but apparently to meet criteria for UC both partners have to be working or seeking work. As a long term sahm I never wanted to become employed so hence would lose UC as not prepared to job seek.
This is my dilemma now, I can see my judgy pants sister saying, you've only done this to get benefit. When there is another good reason like not knowing what's round the corner. Who would have thought that a government would make so many cuts to welfare. Who would have thought that interest rates would go from 4% to 15.5 %? But both happened.
Tabulahrasa
It is the implication of sharing dhs wage that is the problem, not being employed by him. Sometimes he has to pay up to 16 people before he receives the money for work undertaken and obviously other business related expenses. The business is doing well but the money needs to stay there not in our pocket. So because we are in effect low income and would both be working we will probably gain money from TC/UC so I am lead to believe.
Our accountant says its a pretty well known loophole.

ssd Mon 29-Apr-13 22:54:55

I dont see why not, but does the new UC require both partners to work then? Why does it matter if 2 people work to bring in the same money that one person gets just now?

tabulahrasa Mon 29-Apr-13 22:48:43

The way we work it is...other employees are always paid, DP only takes a wage if there is money there to be had.

I happen to live with him, but that doesn't change the fact that I am actually employed by him.

morethanpotatoprints Mon 29-Apr-13 22:41:03

tabulahrasa.

Only moral as would be splitting his income not creating another. This may prove to pay more TC/ meet criteria for UC.
I suppose a bit like the Politicians who had wife as employed bookkeeper to save tax.

morethanpotatoprints Mon 29-Apr-13 22:37:42

Youcan'ttouchthis

Thank you. Yes I know its not millions and this probably sounds a bit daft but you can probably see from the history of low income, neither dh or myself are driven by high earnings. I have nothing against those who have, its each to their own. But I really admire my dh for his straight down the middle honesty and as I am the one who does the form filling like to know I am being honest for all our sakes. I couldn't sleep at night and would be worried sick. grin Dh is often asked to do things for cash, he says yes I accept any payment and then they are shock as he says it will be declared.

tabulahrasa Mon 29-Apr-13 22:36:40

I'm employed by my DP, so is my sister...why would it be an issue?

morethanpotatoprints Mon 29-Apr-13 22:30:14

Happy

I still maintain it is possible to live on one persons min wage. There were no tax credits when ds1 and ds2 were born, we managed as we would now I'm sure. As I said the UC/Tax credits is not the sole reason for this, but also for the security of being able to find other work if the need arises. It hasn't yet but we have 3 dc and who knows what we made need the extra for. Yes there would in effect be 2 incomes but still only equivalent to one min wage split in 2.
I am happy that the moral dilemma has been taken away though if we won't gain extra benefit. thanks

HappyMummyOfOne Mon 29-Apr-13 22:17:21

I wouldnt trust the calculator then, there is no bonus element for you both working if you truly are going to simply split the income already bought into the household.

It does contradict your other thread though where you say people should easily be able to live on one persons wage yet you would have two and are only splitting it to net more in benefits.

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