Spouse tax planning - pension contribution

[TheCyclingProgrammer]

Director renumeration

It's remuneration.

[WordIsBond]

Director renumeration ?! Will take accountants guidance once the next tax year allowances are clearer.

Director remuneration only goes so far. It's one thing to say we need another director to ensure smooth processes if you die or are incapacitated for a time. And to say that being a director brings liability and responsibilities, and therefore director remuneration is a legitimate business expense.

It's quite another when the director remuneration for a non-exec director who does nothing for the company exceeds 10% of annual revenue. At some point HMRC, if they ever investigate, would indeed challenge whether it's legitimate business expense. They can't challenge spouse shareholdings/dividends but they could challenge salaries.

So, partly depends on your income and partly depends on what she does. My wife does payroll and bookkeeping for a multi-employee / multi-contract company in addition to being a director. She's even jumped in and helped on testing on a fixed cost project when we were under pressure. Her salary and company pension contributions are around 4% of revenue, I'd probably feel safe bumping it up to 5-6%, but I don't think I'd want to push towards 10%.

I don't know what the risk point is, where HMRC might think about challenging it. Something you might want to ask your accountant.

Even if you only pay her £8K because of what's discussed above, you could still bump up your salary to £12.5K to take advantage of the employment allowance.

[Spoiler]

It's remuneration.

It's whatever they fookin get paid