If questioned by HMRC she will have to explain what she does for the business (i.e. answer the phone, type invoices/quotes etc.). It won't look good if the business phone is his mobile and he doesn't issue invoices/quotes etc.
Also, make sure that that his wife doesn't have any other income. As, unless her other income plus the secretarial wages are below the PA, she will have to declare the income to HMRC and submit a tax return/pay tax etc.
Thanks very much. What would you say is a reasonable amount? I'm not thinking for this particular client but for future reference.
Also how do I learn about such things like this? They certainly didn't teach us in AAT! I guess the knowledge will be gained with experience but if you could point me in a direction I would appreciate it.
I claim everything that I have receipts for or a paper trail then on top use of home and laundry if applicable.
Thanks
she will need to be on the payroll to be a legitimate overhead or if she was just putting an invoice through for these costs she would need to register for satr as well
What is reasonable really depends what she does and for how long. Eg if he sole traders wife, answers the phone, types the invoices, does the accounts, takes orders, books jobs, etc etc and basically worked say 15 hours a week, she would expect to be paid for 15hours but obviously a payroll and records would need to be kept. If she just helps out occasionally then whatever. It depends what you think she is worth, but if she does enough hours and their is enough profit, then why not pay at least the minimum wage, or just enough not to effect any tax. It really depends what she does and her other income, but just because its family they should be treated as fairly as any other employee, but equally you can't really claim £200 just for answering one phone call. It possibly depends on the trade too.
If you can justify 15hrs, then pay 15hrs. If she is paid around the NMW (currently £6.50ph) and she has no other income, then the weekly pay will be below the LEL so there is no need to register as an employer and make RTI submissions etc.
I usually just include an estimated figure for the year, ranging from a few hundred to a few thousand, depending on the client. As long as I believe that I have a reasonable argument for the amount that I have claimed I am happy.
I don't remember the AAT or the ATT teaching anything about this, I just picked it up from many years in practice!
Thanks very much. What would you say is a reasonable amount? I'm not thinking for this particular client but for future reference. Also how do I learn about such things like this? They certainly didn't teach us in AAT! I guess the knowledge will be gained with experience but if you could point me in a direction I would appreciate it. I claim everything that I have receipts for or a paper trail then on top use of home and laundry if applicable. Thanks
Hi
Most of it comes from experience in the role, in previous roles, lots and lots of reading - you have to be like a sponge. Read up HMRC's website, accountancy magazines, route around this forum and others, review case law relating to banking and tax. Do HMRC webinars, attend federation of small business presentations - the list is endless tbh. Most of which there isnt a lot of time for between clients sometimes!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
