Spouse on the books

[zudecke]

Hi all,

Can anyone give me the skinny on what I need to do (and if it's still worth doing) to get my partner on the books? We're not married but she's out of work and thought it might be a good idea to get her on the books (and yes she'll be doing actual things for the company...).

Most importantly, what happens if we break up?

Cheers,

Z

[northernladuk]

Unless you have actual work to do that she can get paid for then there is nothing to do. It's only a good idea to get her on to pay her the correct level of remuneration for the role.

You can't give her shares as you are not married.

Getting her on to do work is a good idea. Getting her on Just to get a tax advantage is not.

Your accountant will go through the details with you.

[zudecke]

I have work for her to do.

Also, tax advantages are good, no?

[northernladuk]

I have work for her to do.

Also, tax advantages are good, no?

Only if they are genuine and not very aggressive/evasion.

It's your company so it's your risk. If you make stuff up like filing when realistically she will never do it or think a few hours a week is worth 8k per annum HMRC are going to rip you a new one. If she does a couple of hours and you are paying her a couple of grand a year then fill your boots.

Whatever you do check what your accountants level of risk is. If he knows you are blatantly ripping you LTD of he might not do it. If he's not bothered then you are fine... But that fact alone would worry me.

Up to you really.

[northernladuk]

Oh yeah and something else to think about, if she is only out of work a short time putting her on and then taking her off when she gets a job might indicate there wasn't a genuine need.

We need some of the guys that do this or accountants to comment really. I'm possibly a bit too black and white when it comes using people as tax mules.

[sal]

What NLUK said, plus the title is misleading, since if you are not married she isn't your "spouse" at least not according to definition of the word in the dictionary. And in this matter there is a difference if you are married or not.

[ASB]

You can employ her. If it is not a real role and the pay is not reasonably commensurate with the duties it's not a huge problem. They will just be deducted for CT purposes. i.e. you will also pay CT on the gross funds used to pay the salary.

Though if it comes out in an inspection a few years down the line then there will doubtless be penalties and interest and you will restate the accounts for the last 'n' years. More expense and mess.

If you split up then what has that to do with his/her employment. By all means fire them. You'll lost the ET if it went there.

You could give them some shares, or sell them. You are not married so it is a disposal for CGT purposes. You need to value them realistically.

Of course there is also the settlements legislation. If it is seen as a diversion of income (let's face it that is likely) then the income is assessed to you anyway.

Employing people to use their allowances etc in a non job is a good wheeze for sure. :-)

It can often unravel the instant it is challenged though.

[MarillionFan]

Not a real role? Since when was Tea Lady not a real job?

[northernladuk]

Not a real role? Since when was Tea Lady not a real job?

Sorry, didn't mean to belittle your hard work. I'll be more considerate next time.

[WordIsBond]

Most importantly, what happens if we break up?

Maybe she'll sue you for wrongful dismissal.

Maybe she'll tell HMRC every slightly dubious expense you've claimed, and report you for anything she can think of that might be twisted against you.

Maybe she'll sue you for sexual harassment in employment. Best keep your hands to yourself and watch what you say when she's working for you. She'll be your employee, after all.

Think none of that will happen? There's been some pretty lovely breakups....

If there's no risk of breaking up, marry her and then you can give her shares if you want, make her a director, it's all good. But the very fact that you asked the question is pretty conclusive that you probably shouldn't involve her in your business at all. You might save a little bit of tax, but you might pay a very high price for that savings. If that's where you are at, you probably should break up and find someone that you won't have to ask that question.

Thus ends my relationship counselling on CUK for the day.