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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4074
Experience:  FCCA FCMA CGMA ACIS
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My employer is willing to increase my salary to help me achieve

Customer Question

My employer is willing to increase my salary to help me achieve personal goals, but has suggested that, in order to reduce the tax burden and increase my ‘take home’, my wife (currently unemployed) is employed by the company and some of my earnings are routed through her to use her tax free allowance and put more of my salary into the 20% band.
My current salary is 75K with bonus of 15K and executive company car.
Is this legal?
Would my wife have to show she is doing some tasks for the company, or could she be a ‘latent’ employee?
Many thanks.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Well it is not illegal, but sailing very close to the wind. However, if she is formally employed by the company and paid net of tax and National Insurance contributions there is not much HMRC can do about it other than grin and bear it! I suggest that it is most unlikely that yiur wife would ever have to disclose any duties for which she receives emoluments. Have you considered an alternative like salary sacrifice to, for example, fund a private pension? I do hope that my reply has been of some use to you.