She'll be taxed at BR on the other job even though earning below the LEL, because she will have to tick box C on the P46 when joining the other job.
There is nothing in particular to gain by reducing her pay in this job, I think, and if you lower it below LEL she'll lose pension rights because of not earning enough in either job for state pension rights.
My logic is that the PAYE saved on her SA form by reducing her pay would be offset by an equivalent increase in company CT anyway.
(professional accountants may differ in the assessment)
-- Edited by Tom McClelland on Thursday 2nd of February 2012 12:39:21 PM
I run a payroll for a company with just a director and his wife on it.
Both run at £589.00 p/m at the request of the clients Accountant.
The wife has emailed me, informing me that she has now taken on a part time job, where she will be earning aprox £400.00 per month, she is asking me as a result of this if she should stay on the payroll for the company?
With the P/A going up to £8100 ?? next year, would it still be worth perhaps running the client [wife] through the company at perhaps £275 p/m to take account of the £400.00 she earns at the new job?
Her current tax code for what I process her at is 747L, with this new job, I guess she will be on basic rate for that, as its a 2nd job? but if she hasnt earned over the P/A should she be taxed at all ? Confused
I run a payroll for a company with just a director and his wife on it.
Both run at £589.00 p/m at the request of the clients Accountant.
The wife has emailed me, informing me that she has now taken on a part time job, where she will be earning aprox £400.00 per month, she is asking me as a result of this if she should stay on the payroll for the company?
With the P/A going up to £8100 ?? next year, would it still be worth perhaps running the client [wife] through the company at perhaps £275 p/m to take account of the £400.00 she earns at the new job?
Her current tax code for what I process her at is 747L, with this new job, I guess she will be on basic rate for that, as its a 2nd job? but if she hasnt earned over the P/A should she be taxed at all ? Confused
As usual, thanks in advance for your thoughts.
Obviously, you should be discussing this with the client's accountant so he can decide what to do.
I would be tempted to reduce the wife's wages as you have already suggested.
