Tax advantages for Employing your spouse

At first, the idea of giving a role in your organisation to your husband or wife might not seem particularly appealing. Working in such close proximity to your partner, could put a strain on your relationship.

When you begin to take a deeper look into the consequences of such an arrangement however, perhaps it isn’t the worst idea after all…

Clearly, you know the person well, and therefore all the concerns about trust (should) go out the window.

From a financial point-of-view, there are certain benefits that you can achieve through employing a spouse. Let’s take a look at some of them now;

Use up your Tax Allowance!

Almost everyone living in the UK is entitled to an Income Tax Allowance; “the amount of income you can receive each year, without having to pay tax on it”. For the majority of the working public, this figure currently stands at £11,000.

By employing a spouse, you can make sure that your partner is using up all of this non-taxable income. If they do a job for free, pay them! After-all, it’s money going into your household – that isn’t getting taxed. Just think; how much would it cost to employ a non-family member to do the same job?
 
Higher Rate Business – Split your profits

 On a similar note; directors of a business which pays a higher rate of tax can also benefit from taking on a spouse, by making them “more than just an employee.”

If your spouse were to become a shareholder in the company, for example, “you can pay yourselves a mixture of salary/bonuses, benefits, and make use of the £5,000 dividend tax free band, thereby reducing your overall tax bills quite considerably. Not only this, but once more this in more money going into your household.

However, employing a spouse is not as easy as this. Before doing so, you must make sure you are aware of all your duties with regards to the law.
 

Save on National Insurance costs

Rising to £3,000 in April, the employment allowance can be claimed through the payroll giving relief on Employers NI as along as a director only business pays their additional employee more than £8,060.  

Don’t get caught out!

It is important that your spouse is treated like a “normal” employee. Just because you are in a personal relationship with them, it doesn’t mean you can exploit them for your own gain.

The National Minimum Wage rules therefore still apply, and your spouse must actually be paid what they are owed (and are thus affordable to you). Just like with a normal employee, if your spouse is not involved in any other paid employment, a starter checklist form must be filled out.

To avoid any unwelcome visits/checks from HMRC; make sure that your spouse is employed to do a “proper” job within your organisation. 
 

Employing a spouse is a good idea

 All in all, employing a spouse can often be a worthwhile venture for your business. There are many tax benefits (some listed above), that can be realised from doing so.

However, it is essential that if you are thinking about taking on your husband/wife, you do things by-the-book. One quick tip; if you pay them in cash, you may struggle to justify your activities should HMRC come knocking.

Post by Brian

Post by Brian

 

If you would like to find out more information about employing a spouse – or employment in general – check out the payroll section of our website.

Alternatively, get in touch with us at Cooper Curtis today on 0845 303 1144 and we’d be happy to help…

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published

Changing your company's year end

Brian looks at how and why you would change your company's year end date. 

There is no straight answer to 'what's the best year end to have' as it depends from company to company. But I have outlined some scenarios where you would consider a change; 

  • The main reason for changing your year end is for the purpose of cash-flow and to defer paying corporation tax - Due 9 months and 1 day following a year end, corporation tax could be delayed by extending your year end.

  • Or in the opposite scenario, you could decide to shorten your year end if you have a rise in profits, and balance out the CT payments.

  • By extending a year end, you could delay a deadline for submitting accounts at companies house. Its currently £150 fine penalty for lateness rising to £1,500 for more than 6 months late!

  • To align it to the tax year. By changing it to the end of March, it will make admin easier and also predict any personal tax due. 

  • If a company is in a Group a change could be made to align your companies to the same year end for the purpose of reducing admin. 

 

How often can you switch your company year end?

  1. You can shorten your year end as many times as you like,.even by 1 day. In the first year, there must be a minimum of 6 months in the accounting period.
  2. You can lengthen your company year end to 18 months, (or more if co. in administration) but a company may only do this once in every 5 years.
  3. But be aware, you can only change a company's year end at any time before the 'current accounting year end's' deadline.

Contact Brian on 0845 303 1144 if you wish to discuss your options for changing your year end date. 

         Post by Brian

         Post by Brian

Our blogs are designed to give you simple,no jargon, easy to read, information. We appreciate you are short on time, so we try to focus on a topic we get asked about frequently from our recruitment clients to give you the facts only.

If there are any blogs that you would like to see from us or would like more information about a particular blog written, please let us know. We also appreciate any feedback on ways to improve our blogs. 

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content.

The content was correct at the time it was published.

What are millennials looking for in a role? How does this differ to Generation Z?

What is a millennial? 

Millennials are a group of people who have reached adulthood around 2000. Speaking as one myself, they have high expectations of technology, having always had use of the internet and generically speaking tend to adopt to new technology quickly compared to previous generations. 

According to *Deloitte's 2016 Millennial Survey, in general they express little loyalty to their current employers, and values overtake a need for leadership-skill development.

So what are the millennials looking for in a job role?

  • They choose organisations to work for that share their personal values
  • Flexible working, better work/life balance
  • Have a desire to succeed
  • Prefer a Flat structure over hierarchy

Generation Z (the new kids on the block)

The Generation Z are a group who are not aware of a world outside the internet. Born after 1995, they are used to getting everything instantly but still they're a social group, with their lives played out through social media.

Generation Z Career expectations?

Generally speaking, they want to make their hobby their job, they believe in their own network getting them opportunities over qualifications and like the millennials don't believe in a hierarchy at work. 

The fundamental elements remain the same as the millennials, with values and flexible working remaining high on the list. This doesn't mean however they do not want to be successful. 

 

Further reading;

* http://www2.deloitte.com/global/en/pages/about-deloitte/articles/millennialsurvey.html 

 

Post By Caroline

Post By Caroline

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.

Cooper Curtis at the Recruitment Agency Expo NEC

After the success of last year's exhibition, Cooper Curtis are thrilled to be exhibiting again at this year's Recruitment Agency Expo at Birmingham NEC on 28th and 29th September.

Come and say hello to Caroline and myself at stand D29 opposite Theatre 2 for freebies and information on how we can support your recruitment business. 

Entry to the show is free and there are plenty of useful seminars and recruitment suppliers attending over the two day event. 

We look forward to seeing you there!

Post by Brian

Post by Brian