tax partner or employee

[stumac]

hi lads not been on a while but here is a quick question

if i take my wife on as a partner in my business does she also have to take out public liability for clerical duties

or other option take her on as employee but would i then need employers liability

anybody went down this road in the past any advice would be greatful

 

[DHTiling]

hello stu mate.. either give grumps a pm or wait till he see's this thread....

 

[stumac]

cheers mate will wait for grumpy or anybody else thats done it
ta

 

[Fekin]

As far as I see it, if your wife was not going into customers houses and doing work then why would she need public liability insurance.
As for employers liability, it all depends on how likely you think she will be to claim injuries against you if she slip, tripped or fell in the home while doing clerical duties :lol:

In short, no, I cannot see any reason to need her insured if she will have nothing to do with on site work.

 

[stumac]

cheers mate what i am getting at is if she is a partner then she is self employed and by law must have public liability(i think) but if she is employed then i think by law i would need employers liability.
she does the work at the moment but i feel i could be taking advantage of her tax free entiliment ie £5000 odd a year she can earn without paying tax so less profit for me so lower tax bill but i want to make sure i cover all the angles

 

[Fekin]

Yeah I understand where your coming from, but if she is never going to be leaving the house while working, I cannot see how she would have to have public liability insurance.

Though, we are talking about England and the Labour party, so anything is possible.

 

[grumpygrouter]

Hello Stumac, if your wife becomes a partner in the business, then you are operating under a different legal format business wise. You would need to adjust your insurance to cover a partnership format. The public liability part may not have any effect as usually in my experience, the insureres ask how many people are actually needing cover. If your wife operated just on a clerical basis then she would not require cover. Best to get advice from your insurers. if you want to employ her then you are tallking about a whole different ball game! You would need employers liability and you would also be required to comply with ALL the legislation regarding employment.

There is a big discussion going on in another thread about this. If it was me, I would go for the partnership.!!

Grumpy

 

[Fekin]

Yeah, and god help you if she gets preggers :lol:

 

[stumac]

thanks mate thats what i was looking for. and thanks fekin i posted this on another forum(not tiling and havent had any replys) grumpy if i want to make my wife a partner do i just phone inland revenue and the insurers or do i have to get it done proffesionally

 

[grumpygrouter]

thanks mate thats what i was looking for. and thanks fekin i posted this on another forum(not tiling and havent had any replys) grumpy if i want to make my wife a partner do i just phone inland revenue and the insurers or do i have to get it done proffesionally

All you need to do is notify the HMRC that your wife (she will have to do it) is going self employed. They will send out a booklet and you fill in the forms - you should have gone through the same procedure - You then need to decide a date for your change of entity form Sole Trader to Partnership and inform HMRC of this date. I would suggest you discuss this with your accountant or advisor for your current business, to arrive at the most appropriate date for this. There are some tax implications so please don't do it without consulting someone, even HMRC would probably advise you if you spoke to them. Once you know your change over date, inform your bank and your insurers and anybody else you deal with on a day to day business basis. Your bank may want to open a new account for you and close your old one.

Grumpy

 

[stumac]

All you need to do is notify the HMRC that your wife (she will have to do it) is going self employed. They will send out a booklet and you fill in the forms - you should have gone through the same procedure - You then need to decide a date for your change of entity form Sole Trader to Partnership and inform HMRC of this date. I would suggest you discuss this with your accountant or advisor for your current business, to arrive at the most appropriate date for this. There are some tax implications so please don't do it without consulting someone, even HMRC would probably advise you if you spoke to them. Once you know your change over date, inform your bank and your insurers and anybody else you deal with on a day to day business basis. Your bank may want to open a new account for you and close your old one.

Grumpy

thanks again i did do this when i set up and i will discuss with business gateway advisor but sounds the way ahead to me. just one more question if you dont mind can i back date three months as per the going self employed rule of informing hmrc within three months

 

[grumpygrouter]

Stuart, once you are set up as a partnership, just drop a letter to your Tax Office telling them you are a partnership and give details of who the parners are. If you are able to, give them both of the partners NI numbers and UTR's if you have them and tell them the date that you started trading as a parnership. They will probably write back and ask who the "managing" partner is for signature purposes and they will issue a separate UTR for the partnership.

Good luck. Any more questions, just ask.

Grumpy

 

[stumac]

again thanks grumpy i will let you know how i get on

 

[Grace'sDad]

Where's the other thread re. partnerships & tax???

 

[grumpygrouter]

Where's the other thread re. partnerships & tax???

Don't know, was there one?

Grumpy

 

[Grace'sDad]

There is a big discussion going on in another thread about this. If it was me, I would go for the partnership.!!

Grumpy

You said it mate!!!

 

[grumpygrouter]

Ah! that post....

http://www.tilersforums.com/tiling-forum/8400-employing-staff.html

Grumpy