My new accountant just told me this!

23-05-03

Got myself a new accountant at the BNI meeting this morning as well, who told me something that may be of interest to people:
There are several test cases in the courts at the moment taken by the Inland Revenue, involving 'husband & wife' ltd. companies where the wife (or husband) isn't on the payroll but both are equal shareholders, and they take most of the income as dividend. Appantly this is being construed as a 'tax dodge' and the Revenue are treating all the dividentd as being the husbands for tax purposes. They're advising clients that if the wife (or husband) is employed by the company then that should be OK.
DISCLAIMER: "this is not intended as tax advice, make sure you check with your accountant"

23-05-03

was thinking about that - got to get married first. Was thinking at first a "partnership" (non-limited) to use personal allowance effectively.

They'll try and get their cut one way or another!

23-05-03

Was an artilcle in the Sunday Times about this but a lot of them are famous people that pay there wives for "spiritual support" without them actually doing anything.

Anyone here could just say "My wife develops websites for me" - (or something more believable like makes tea and biscuits [and also has a very demanding role looking after the paperworks and day to day communications])

25-05-03

Yep, got told the same, they are cracking down on paying the wife dividends, it is now classed as income for you*

*Ask your own accountant, but mine told me it wasn't worth thinking about anymore.

Ben.

26-05-03

Mr Talk4, did you realise the Brum email thing at everyone.net has ads for people to download Gator?

It's for a program that keeps your PC clock accurate, but the real purpose of the program is to install Gator, "piggybacked" onto the clock program.

I have everyone.net email on one of my sites but I'm replacing it with one where I control the advertising.

Anyway, back on topic (almost), does this mean the taxman will not allow me to pay my gerbils any more?
They carry out a very important role, shredding paper for me. Surely they should be paid for this?
If I can't pay them I'll have the rodent rights people on my back.

26-05-03

tom, I should think there are a few women around here who are wives, mothers, buyers, webmasters and business owners.

I know I do all that and more alongside my husband. We have equal tea making responsibilities.

Women do support their husbands. If you had to pay someone to do the stuff a wife does it wouldn't come cheap.

For instance I have to pay a childminder and housekeeper. That is stuff I would be doing if I wasn't working all day trying to flog jokes.

27-05-03

My wife has just completed her 5th website for me, I consider her a genuine partner in this now, and I want to pay her.

Yes - it is true to say that I want to pay her for tax reasons, but also, she deserves paying for all the hard work she does - she knew nothing about computers two months ago (she is a dental nurse 9-5) and know she writes sites and ranks number 6 on google for a highly competetive term

What should I do?

27-05-03

Interesting topic!
I bought some rather expensive domains and set up a business, i have since got married. My husband hated his job in engineering and so he packed in his job and trained himself in a few web design programs, he has built the site and it is now launched but I haven't yet arranged the company ownership stuff at companies house although I registered the limited company.
My husband now works on the site full time and I work around my day job which means I put in about 3 hours every day.
I have heard that it is best for tax reasons to put the business in my husbands name and so he gets the salary, which is right as he does the lions share but I am a bit peeved that we cant have half each. I am not worried about taking a salary but would like to own 50%. It deasen't make sense to pay myself as I am on the higher rate tax braket anyway. Anyone got any advice?

28-05-03

<blockquote><strong><em>Quote:</em></strong><hr>Anyone got any advice? [/quote]

See an accountant.

28-05-03

JF, what are you replacing it with? I've got it on whereisthematrix.com, mainly because I could find a similar aleternative. I don't mind ads - that's how they makea living, but the gator thing is a pain.
There used to be a couple of alternatives (going years back now...), but I haven't been able to find them recently.

28-05-03

Have a free chat with Business Link

www.businesslink.org/

Very useful for all aspects of setting up and running businesses, accounting, what you can/can't do... they may even help you apply for a new business grant too.

Cheaper than an accountant and can be helpful.

Jason
--
Loquax - www.loquax.co.uk

28-05-03

One possible option is to pay yourself the minimum wage to maintain your National Insurance contributions and the remainder as a dividend after corporation tax.

28-05-03

Didn't mean any offense

Just giving examples of what the excuses "STARS" make to the Taxman.

28-05-03

"One possible option is to pay yourself the minimum wage to maintain your National Insurance contributions and the remainder as a dividend after corporation tax"

Might be wrong, but my understanding was that this was being jumped on by the tax office now - especially after many IT contractors earnt £100 a month and took dividends of several ££'s back in the IT boom days.

Jason

28-05-03

"One possible option is to pay yourself the minimum wage to maintain your National Insurance contributions and the remainder as a dividend after corporation tax"

I pay myself a moderate wage of £1,000 per month for this reason as its enough to prove you're not taking the micky, and then take the rest as and when required by the means of dividends (reflected in the accounts of course)