To consider this a job and receive payment/tax credit(42 Posts)
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
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.
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)
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.
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.
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.
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.
I get where you are coming from. I second the suggestion to see an accountant.
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?
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.
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.
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.
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
Can you get the accountant to put her advice in writing. At least then you have it to refer to later.
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. .
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.
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
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.
Yes, you should do it. You're doing a job.
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!
Join the discussion
Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.Register now
Already registered with Mumsnet? Log in to leave your comment or alternatively, sign in with Facebook or Google.
Please login first.