Income shifting?

husband and wife partnerships

Didn't find your answer?

I have been approched by a new client, husband and wife, husband is a self employed taxi driver earning £20k, wife is self employed cleaner earning £5k.

Previous firm of Accountants have set up partnership and included all income and expenses as one trade so they are each assessed on £12.5k.

Surlely this is wrong and part of settlements legislation ?  They are adamant the Accountants assured them it was fine to do this.

I would advise 2 self employment returns and a marriage allowance transfer.

Am I missing something?  Are they allowed to do this?

Replies (5)

Please login or register to join the discussion.

By The Dullard
04th Dec 2019 10:31

Maybe the wife cleans the taxi?

Thanks (2)
Replying to The Dullard:
04th Dec 2019 10:57

...and her husband taxis her to her cleaning jobs.

Thanks (0)
By B Roberts
04th Dec 2019 10:37

Are those the actual figures? - is it a coincidence that their combined income is £25k (exactly 2 x the Personal Allowance)?

Thanks (0)
Replying to B Roberts:
04th Dec 2019 10:47

These are actually 17/18 so slightly over personal allowance.

Thanks (0)
04th Dec 2019 10:56

I agree that this is bogus. It's no real partnership, and I suspect HMRC would have grounds to challenge it.

Thanks (1)