Am I worrying unnecessarily here. Husband and wife professional partnership has suffered badly with Covid due to the essential personal contact required. Profits have historically been around £21,000 each year. Husband has a private annual pension of around £5,000, wife has no other income. They are below state retirement age.
Profits are split each year to take advantage of the spare personal tax allowances and Class 4 bands. However, for 2020/21 the position is approximately as follows:
Husband's private pension £5,000
Husband's SEISS I,II and III £6,000
Wife's SEISS I,II and III £6,500
Partnership Profit £7,000
I can divide the profit of £7,000 in a way that saves the most tax and NIC by skewing the profit towards the wife, but by doing so the husband's private income would then represent more than 50% of his total income.
Clients will pat me on the back for reducing 2020/21 tax and NIC to the lowest possible figure. But will they pat me on the back if HMRC were to apply the 50% test on 2020/21 income for the 6th or later SEISS grants. Is there any likelihood of this happening.
Seems like HMRC will be able to dream up any rules for qualifying for future grants.