Protecting Carers Allowance - new small business.

Partnership with husband or employing husband?

Didn't find your answer?

 I have a new lady client who wants to open a small retail outlet on which the annual profit is likely to be quite low.

The problem is she is currently in receipt of carers allowance for her son. She is required to help him 35 hours a week and must not earn more than £110 per week (wage or self employed profits)

I would like advice on the best way to structure the business to give clarity of what her actual earnings are (and cap them).

This small business does not justify a limited company.

The options therefore seem to be:

A partnership with her husband whereby we specify her profit share at say £5200 per year maximum. We ensure her drawings are always recorded weekly and are never more than £100 per week.

Or, we set her up as a sole trader employing her husband and he draws a wage through PAYE which would probably reduce the profits to or below say £5,200.  The wife would still limit her drawings to £100 per week in case of an interim enquiry.  The husband will genuinely be helping in the business so I don't think that creating the wage in this way is such a problem.

I wonder if anyone has experience of the 'carers allowance administrators' and which method they might be more comfortable with - Partnership or sole trader with husband on PAYE?

Thanks

Replies (1)

Please login or register to join the discussion.

Scalloway Castle
By scalloway
13th Mar 2017 17:07

I am sure there was a very similar thread in UK Business Forums recently. Unfortunately I can't seem to find it but it as I recall the gist was that this was close to being a benefit cheat/tax evasion. I stand to be corrected if there is a way around this.

Thanks (0)