Spouse remuneration

Spouse remuneration

Didn't find your answer?

I have a sole trader who for many years has claimed a deduction in his accounts for spouse remuneration, approx £4000 per annum. Historically, his spouse had no other income so there was no PAYE issue for him & she didn't declare her earnings to HMRC.

She is now in receipt of a state pension.

Due to the change in her circumstances, is he obliged to get her to sign a P46 to state that she has a pension? If so, she would sign statement C & he would be responsible for operating PAYE using code BR.

Or can he continue to pay the earnings gross on the basis that when he took her on many years ago she signed a statement confirming correctly (at the time) that she had no other income.

I am not sure if her total income now exceeds the threshold but I don't think that is relevant to him anyway.

Replies (2)

Please login or register to join the discussion.

David Winch
By David Winch
05th Sep 2014 17:02

Presumably (i) he has actually paid these wages to her and (ii) he has no other employees & so has not operated RTI?

David

Thanks (0)
Euan's picture
By Euan MacLennan
05th Sep 2014 17:22

Probably

Wall1690 wrote:

Or can he continue to pay the earnings gross on the basis that when he took her on many years ago she signed a statement confirming correctly (at the time) that she had no other income.

Form P46 has been replaced by the Starter Checklist.  It asks the same questions as the P46, but as its title indicates, it is not appropriate for someone who has been employed for a long time.  So, there is certainly no requirement to get her to sign a new form.

As her pay is below the NI LEL (and assuming that there are no other employees), I think that he is therefore not required to set up a PAYE scheme or hence, report her earnings under RTI.

If her £4,000 of pay plus her state pension puts her over the level of her personal allowances, she would be required to notify chargeability to HMRC (register for self-assessment) and submit personal tax returns.

Thanks (1)