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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4207
Experience:  FCCA FCMA CGMA ACIS
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I am an employee working full time. I have the chance of working

Customer Question

I am an employee working full time. I have the chance of working in my spare time from home through the internet but I must invoice the company I do the work for. Can my wife set up as a sole trader and I do all the work through her name? She doesn't work and I would like to reduce my tax liabilities.
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Yes, that is a good idea and one very commonly practiced. Your wife would have to set up as self employed with HMRC and register. This can be done on line. Have a look at HMRC web site 'Tax returns for the self-employed' which gives a summary of the taxation process for this class of person. One word of caution though. In the unlikely event of a dispute between effectively you and the customer it is your wife who will be liable in law, not you. She will, of course, have to pay self employed NI contributions also.

Personally, I would recommend setting up a limited company for this which places a barrier between you, your wife and the customer in the event of dispute. However there is some administrative inconvenience involved in which you may not wish to participate. Your wife can then bill the company or the company operate PAYE for her. If the latter option is exercised there will be the employer's element of NI to be paid as well. A bit of work on the back of an envelope will be needed to find the more cost effective method.

I do hope I have helped you with your question.
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 3 years ago.


Thanks Keith, that's exactly what I was hoping to hear.


One thing I didn't mention, my wife is not British (or from the EU), but she has lived here for around 20 years, has her own NI number and has worked a number of the years in the past and made NI contributions (she has a a "Given leave to remain in the UK for an indefinite period" stamp on her passport issued by the Secretary of State for the Home Office).


I presume she can set up as a sole trader, which seems to be the most simple option??


Thanks again for your advice.

Expert:  bigduckontax replied 3 years ago.

My wife is a Thai with exactly that stamp in her passport! If you look at the paper work sent to her on her first entry to the UK you will find an official letter to the effect that she may undertake any employment save that which is precluded by other regulations eg say as a medical practitioner, dentist, vet, barrister or solicitor.

Customer: replied 3 years ago.
Thanks so much again Keith, top rating for your support and advice.
Expert:  bigduckontax replied 3 years ago.
Thank you for your excellent support.