IR35:
Employee - Question 2
I employ my wife as company secretary, if I only work on 'relevant' engagements will I have to pay my wife out of taxed income?
You may only claim a deduction at Step 1 for the 5 per cent expense allowance
and at Step 3 for any expenses incurred by the intermediary that would be
allowable if you had incurred them and been employed by the client when
working out the IR35 deemed payment. It is unlikely that any wage the company
pays your wife for duties she performs for the company will be allowable
at Step 3, however this will not affect the position regarding any deductions
in the company accounts for her wages.
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