New dividend rules meaning tax returns for wives...

OK so the new rules mean that due to only the first £5k of dividends being tax free from April 2016 if we have a company where the income (dividends) is split between a husband and wife the wife will need to do a tax return.

What are your thoughts on this and are you going to incorporate it into your fees or charge extra?

Interesting a one man band company is going to also be affected by the new payroll rules from April as they are not entitled to the ER's NI relief. This means that £8k wish (the NI threshold) will become the standard salary to put through. I'm awaiting confirmation on whether you can add a wife onto the payroll to avoid this and what the practicalities will be.

Steve
KernowAccountantJawzMarieNoelle

Comments

  • Jawz
    Jawz Registered Posts: 53 Regular contributor ⭐ ? ⭐
    Hi Steve,

    Interesting topic you've raised here. Not very good news for owner managed/One man band companies really.

    I would've thought one would charge a bit extra to do the wife's return too.

    As for the new payroll rules coming into effect in April, adding the wife, if confirmed would perfect for the one man bands. You can bet on the restrictions/clauses that it will comes with though.... Example like 'You will have to prove that the wife actually does the work and is paid the normal going rate for the work she does' :)

    Either way, it will be interesting to know the outcome. Keep us posted and thank you for raising a relevant topic.

    Jawz

    KernowAccountant
  • MarieNoelle
    MarieNoelle Moderator, MAAT, AAT Licensed Accountant Posts: 1,369
    I have also been following this and I expect a lot of MIP will be affected.
    Another implication will be that the exemption of auto-enrollment for a director only payroll will have to be reviewed.
    babsa
  • AATMIP
    AATMIP Registered Posts: 2
    Gosh it's all so difficult and a complete mystery

    I look forward to your confirmation
  • stevo5678
    stevo5678 Registered Posts: 325
    I agree in principal for charging more for more work but also believe in the day and age of online software etc that competition is high so how much we charge is largely dictated by the market.
    Londina
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