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Self Employed Paying a Spouse

  • 26-10-2015 10:51am
    #1
    Rava
    Registered Users, Registered Users 2 Posts: 1 ✭


    Hello, I'm looking for some help in completing a tax return. My Dad has a work pension so pays PAYE. However he also set up as a small consulting practice as a sole trader so needs to file an income tax return. Because of his work pension, all profits earned in the practice are taxable at 41%. My question is could he pay his spouse a salary (who has no earnings) and completes the day to day admin for him to reduce the tax bill? They are jointly assessed so would it make any difference? In addition, if he pays himself a salary from drawings does he have to pay tax on this? Appreciate any guidance you have.


Comments

  • #2
    adrianw
    Registered Users, Registered Users 2 Posts: 236 ✭✭adrianw


    Once it is legitimate - yes. Any salary she receives up to €24,800 will make a diff.
    Married couple tax at standard rate 20% band on €42,800+non assess able spouses income. However she will NOT receive the PAYE credit.


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