As a sole trader - can I pay dh a wage?

(6 Posts)
TracyK Fri 21-Jun-13 12:22:41

dh was made redundant in March and so I have taken on a lot more work - probs putting me near the higher tax bracket.
I was thinking of training him to do some of my less complex clients.
If he registered as s/emp - could he invoice me and I pay him some of my fees? ie using up his tax allowance?

Talkinpeace Fri 21-Jun-13 14:14:31

yup - or make him a partner in the business, or make him an employee

mothersmilkandherchickenseggs Fri 21-Jun-13 15:51:56

if you make him an employee you can pay him around £7500 and it will be tax free (for him) and it can offset against your profit this is what we do you will have to set up a PAYE but if you have an accountant they can do that for you

conorsrockers Fri 21-Jun-13 15:57:30

PAYE will be favourite. If he invoices you he will need to be invoicing other people - if you are the only person he works for HMRC will deem you to be his employer and that you are 'responsible' for him. As I understand it.

TracyK Fri 21-Jun-13 20:55:15

Thanks guys. I did think of the paye route. I'll incur er's Ni then wont I and a whole load of hassle each month?
He might be invoicing other stuff anyway to others - depends what he ends up doing.

Talkinpeace Fri 21-Jun-13 21:17:09

if he's PAYE, you can pay him 675 a month with no ERS NI this year
and next year when the £2000 ERS NI discount kicks in for small businesses you can pay him right up to the NI limit of £7745 with nil RTI returns

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