How does dh go about employing me to offset his tax bill?

[BonyM]

Not sure if it is still possible, but know that in the past someone could employ their spouse, pay them up to the max allowable earnings before tax is due (currently just under 5k I think), and thereby avoid paying tax on that amount.

As dh does quite a bit of (taxable) private work, and I often do bits of typing etc for him, we wondered if we could take advantage of this.

Does anyone have experience of this, or know how to go about it? Would there be a NI liability, and would we need to keep records of work done/payments made etc., or is it sufficient to just detail it as an expense on the tax return?

DH is a tax specialist, will ask him tomorrow.

Just done it, but we needed to have a limited company that pays us both a salary. I don't know if you can do it otherwise.

If you aren't actually working for your DH then technically what you are proposing is tax evasion.. doesn't sit right on a site so usually left wing really...

Our accountant sent us a very firm letter about this a couple of months back. There has been a recent case in which a couple has been prosecuted for tax evasion and made to pay back the owed tax plus costs etc. As we understand it from the acct it wasn't a large business or a large amount.

As I am sure you know if you have your own business you can be checked at anytime for whether al your legal and tax obligations are being met and this will now be checked also. If you are claiming a wage you will need to be able to prove exactly what you do for the business and how etc etc. They are being very strict. Also will have to justify another job/earnings if you have them and show how your children are being cared for to enable you to do the job that earns the money.

As previously mentioned you would be better able to do this if you are ltd company but otherwise I would suggest that you log your hours and what you have done etc every week and just pay yourself what would be a reasonable hourly amount for this. You need proper advice though form your accountant especially if you have/him have another income as well.

To be honest I wouldn't touch this with a barge pole unless you are 100% sure you are earning the money rather than hust using it to get out of paying tax. It isn't worth it and the tax people are so clever nowadays and let you get away with nothing. Much as like any one we would love to get one over them it really isn't worth the risk and nightmare if you were caught.

HTH

have no idea but make sure y0uo organise a good wage packet

We do this. I have time sheets, and we drafted a contract (in the first draft DH included a clause prohibiting "drunkenness or foul and abusive language" . DH's accountant does a payslip service for a pretty small fee. We have to pay NI on it but it's still worth doing.

The Revenue will register you as a small employer and can give you plenty of help with setting it up - I did it from the employer's angle when I employed a nanny a few years ago.

I agree with Neena that it's just not worth doing unless it is straight up. In our case I have the relevant qualifications/skills genuinely do the work

You will also need to declare "your" earnings if you are claiming tax credits..

Thanks for the advice.

It wouldn't be tax evasion (perish the thought! ) as I do actually do work for him on occasion - typing, proof-reading etc., because his secretary is pretty useless and often lets him down, and he also has a massive workload.

He is director of two companies as well as doing his main job so I guess one of those could pay me.

He earns too much for us to be claiming tax credits, so this would not be an issue. I guess the best thing would be for him to speak to his accountant.