Q: I am a sole trader. My accountant says I should employ my wife on a salary of £10,000 to clean the premises. Is this the best advice?
Apr 28 2009
Answered by: Marc Barber Ask a question
Whether it is “best advice” will depend upon the circumstances of your particular case. Expenses deducted from trading income must be “wholly and exclusively” for the purpose of the business. So do you operate from premises which it is your responsibility to clean? How much work is involved? If you did not pay your wife to undertake the work, how much would it cost to get the premises clean by a third party? £10,000 is £192 per week, which at the national minimum wage (NMW) is equivalent to approximately 32 hours per week. Cleaners may cost more than the NMW; you should establish what the “going rate” is in your area. However much the going rate is, and consequently however many hours the calculation turns out to be does the cleaning require that much attendance? If you pay your wife to do the cleaning, you cannot pay anybody else to do the same work.
These are the sort of questions you must be able to answer if you are challenged by H M Revenue & Customs.
Comments