How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Sam Your Own Question
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13938
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
16196420
Type Your Tax Question Here...
Sam is online now

My partner is a sole trader of a small business that

Resolved Question:

Hello,
My partner is a sole trader of a small business that make a profit of around £28000 per year.
I am a stay at home mum who helps out a lot with the general running of the business.
For the last 7 years we have not been paged myself a wage as such which for tax reasons is not great.
Im not sure which is the best route?
- to be a part time employee.
- or to change the business structure to a partnership, if we did this would we be able to use both our tax allowances even if the business only makes a profit of £28000
Many thanks
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.
Do you actually contribute to running this business ?
If so what duties do you undertake, and what is the nature of your partners trade.
I can then advise the best way forward
Thanks
Sam
Customer: replied 2 years ago.

Hello,

Yes I do,

I answer the phone book appointments.

Do the bookkeeping and tax etc..

Expert:  Sam replied 2 years ago.
Hi
Thanks for your response
Then that fine to proceed with either way - however as you only contribute a small amount to the overall business (although you do not advise what your partners trade is) then you would need to either pay yourself a wage (that reflected the hours you do) - perhaps use the National minimum wage as a guide
21 and over 18 to 20 Under 18 Apprentice*
2014 (current rate) £6.50 £5.13 £3.79 £2.73
Or if you change the entity of the business over to partnership - then you need to determine what % you contribute (I imagine between 5-10%) and then set yourself up with HMRC as the partnership 10%/90% or 5%/95%
5% of £28,000 would work out £1400 a year
10% of £28,000 would work out £2800 a year
But if you worked say 20 hours a week at £6.50 = £130 x 52 = £6760 a year - you can see the wages route is more cost effective for you, and as a deduction from the business.
Note that the National minimum wage is just a guide o the least amount that can be paid, so more can be paid BUT clearly £20 an hours for admin duties would be excessive!
Let me know if you require any further assistance.
Thanks
Sam
Customer: replied 2 years ago.

ok thanks.

We can make the partnership 50/50 then?

He's a trades man who works full time and I probably do around 15 hrs a week.

Expert:  Sam replied 2 years ago.
Hi
No you cannot make the partnership 50/50 as you do not undertake half of the work
It would be about 5% (10% at most)
Thanks
Sam
Customer: replied 2 years ago.

ok thanks.

if we went down the employee route.

What do I actually have to do?

On the gov website it say if you earn under £112 a week you dont need to do PAYE?

so I would pay myself under that threshold.

I will actually pay myself a wage into my own account.

Do I need a P60?

Thanks

Expert:  Sam replied 2 years ago.
Hi
Thanks for your furtehr questions, which are more than your original question suggested you were asking for. AS per Just Answer policy - you either need to post this as a new question - with a new amount offered OR I can send through an additional services request. (I am sorry about this)
But as its your first time on Just Answer I can advise that if you pay yourself less than £112 a week, then you do not need to register as PAYE with HMRC and there is no P60 - but you will want to keep a note of the wages you have paid - and prepare payslips (and keep a copy with your husbands records, as evidence of the payments made to you - and make sure those payments go from his bank account to yours)
Thanks and let me know if you require any furtehr advise on the information I have provided - or if you have all that you need, it would be very much appreciated if you could rate the level of service I have provided (or click accept)
Thanks
Sam
Customer: replied 2 years ago.

I appreciate your info thank-you.

could i just ask you is it ok to back date payment for my wages for our 2015/16 books please?

Many thanks

Expert:  Sam replied 2 years ago.
Hi
Thanks for your further question
As this will just be back to 06/04/2015 - then yes this will not be an issue
Thanks
Sam
Customer: replied 2 years ago.

sorry.

This really is the last question,

I meant 2014/15 books

Expert:  Sam replied 2 years ago.
Hi
No HMRC will not accept this as this is a whole year - which has ceased !
Thanks
Sam
Sam and other Tax Specialists are ready to help you