Share this content
3

Tax dodge?

Tax dodge?

Didn't find your answer?

The reason MPs can get away with employing family members who do no work is that it is perfectly legal: Collier v Sunday Referee Publishing Co (1940): 'Provided I pay my cook her wages regularly, she cannot complain if I choose to take any or all my meals out:' per Mr Justice Asquith.
So can a person employ family members in her or his business even though he or she requires them NOT to do any work and adopts this practice in order to gain a tax advantage?

John Wright

Replies (3)

Please login or register to join the discussion.

avatar
By lawmaniz
16th Jun 2008 17:34

Tax dodge?
Another reason why it might be (and probably is) perfectly legal to employ and pay a salary to employees who are not required to do any work by the employer is that the 'consideration,' i.e. the weekly or monthly pay, is paid because these employees are AVAILABLE for work although, of course, they do none. What do all you clever accountants (chartered or otherwise) say about that?

Thanks (0)
avatar
By Anonymous
16th Jun 2008 17:10

Asquith J
Surely the judge was only looking at this from the point of view of the cook. There are (to use a very un-1940 expression) quite a few other stakeholders to consider.

IMHO our elected reps are spending public money and we should all benefit if they adopted at least some of rules that apply, theoretically at least, to the public sector eg
- no nepotism
- open competition for posts that are in their gift
- no expenses beyond the minimum to do the job
- transparency

Thanks (0)
avatar
By Anonymous
10th Jun 2008 06:54

Wholly and exclusively
The payment would fail the test of being "wholly and exclusively" for the business and therefore would not be an allowable deduction in the business tax computations.
I guess for MPs there is no "business" as such, so nowhere to deduct these spurious salaries from anyway? In much the same way that you get no relief if you employ a nanny in the home - oh, unless you are an MP of course, and then it is a valid mployment expense.....

Thanks (0)
Share this content

Related posts