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A husband and wife are extracting salary from a company at 663 per month. The husband is a director and I know that payment date of a director can be the date it is credited to a dla. The wife is only an employee. Is it possible to credit the salary to an employee current account which will be deemed payment date for rti purposes?

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Euan's picture
By Euan MacLennan
23rd Sep 2014 10:24

Not exactly

This is not a RTI issue.  It is the basic rules of operating PAYE.

The guidance on page 5 of Booklet CWG2 (page 10 of the PDF) says:

"If the employee is not a director, operate PAYE on the earlier of:
• when you actually make the payment
• when the employee is entitled to be paid, even if the pay is not drawn until later.

If the employee is a director, operate PAYE on the earlier of:
• when you actually make the payment
• when the director becomes entitled to be paid
• when the payment is credited in the company accounts or records, ...
• when the remuneration is fixed or determined
..."

So, it is much the same as for a director - if the husband and wife are entitled to be paid at (say) the end of the month, that is the pay date for both of them.

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By peterpaice
23rd Sep 2014 10:50

Many thanks. Is there any other legislation that I need to look at regarding employment of spouse. She is performing duties for the company so can't see it being a problem if she is paid a salary

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Replying to lionofludesch:
James Reeves
By James Reeves
23rd Sep 2014 10:59

NMW

If the spouse is not a director, ensure that she is paid at least the national minimum wage. i.e. ensure the hours worked are within NMW limits for the salary paid.

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Euan's picture
By Euan MacLennan
23rd Sep 2014 11:01

Where do I start?

The level of salary must be justifiable in terms of the work done for the company or (part of) it will not be allowed as a deduction from the company's profits as a business expense for corporation tax purposes.

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By peterpaice
23rd Sep 2014 13:28

She looks after all the admin side of the businees. If she becomes company secretary will minimum wage still apply?

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Euan's picture
By Euan MacLennan
23rd Sep 2014 13:49

It is debatable

It used to be said that company secretaries, being office holders, were exempt from NMW.  I was never sure about that and am even less so now that company secretaries are no longer required.  The odd thing is that if it was not a limited company, family members of the employer would be exempted, but this does not extend to family limited companies.

Why not make her a director?  NMW problem solved!

Incidentally, is she a shareholder who can take dividends?

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By peterpaice
23rd Sep 2014 13:53

No she is not a shareholder only the husband. No reason to change this as after expenses and salaries there is minimal profit for dividends which is covered by husband basic rate band. Yes could definitely make her another director and think it would be easiest thing to do. I just hope they dont divorce anytime soon

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Replying to Vile Nortin Naipaan:
Euan's picture
By Euan MacLennan
23rd Sep 2014 13:58

No worries

peterpaice wrote:
No she is not a shareholder only the husband. ... I just hope they dont divorce anytime soon

As the husband is the sole shareholder, he has control of the company and by passing a resolution, could remove his wife as a director!

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By peterpaice
23rd Sep 2014 14:00

Good point. Many thanks. However could she claim for loss of office and compensation?

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