Self Employed Builder Paying Wife A Small Salary

Natsmomma

I have recently taken over the books for a sole trader in the building industry.

His previous accountant allowed him to it through £3k/annum for his wife's salary as she helps him with bookkeeping and phone calls etc.

I have read that this has to be proven by means of actual payments and work being done, but are there any other rules which I should be aware of, please?

Thank you in advance

groundy

This is common nature and is unusual for HMRC to object to unless the wifes salary is completely ridiculous.

T.C.

Agreed. Not usually a problem unless the wages are excessive, then they will ask for proof of what she actually does. I would just check with them what her role is in the business, just to cover yourself for questions at a later date.

Natsmomma

Thank you both for clarifying this. It's good to get another opinion.

Kind regards

jewels.p

If the Wife is paid a Salary of 3k does she have to declare it as income if she is in Full-Time Employment and pay the tax due on it through PAYE?

T.C.

Oh yes! I only usually use this when the wife/husband is not employed elsewhere. Otherwise it would involve PAYE.

EleanorH

Should he have to register as an employer for this?

T.C.

Only if he needs to use PAYE. If the wife has no other job, then no, as she is below the tax threshold.