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Hi all,

Does anyone have experience of paying salaries from a Ltd company? I would like to pay my partner a small salary for her contribution to my BTL business. 

I am not based in the UK, but the company is. I would like to pay, say £5,000 p.a. 

Are there any implications to consider? Should I appoint her as a director?

I will discuss this with my accountant, but would be good to hear any other experiences.

Thanks

JJ

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Hi JJ, i made my Mrs a director and gave her 30% shares. it made sense for me to utilize both our tax free allowances thus reducing my overall tax bill. my accountant set it all up so definitely speak to yours first

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Just incase you don't want to put the missus on as a shareholder, if you want to employ her and pay a salary, then it should ideally be comparable to market rates (I think this more counts for overpaying someone rather than under) and you need to just be able to prove she's doing as you say. E.g. If she's helping with the books, just have her access, some emails etc.

This was the advice given to me by my accountant, so your mileage may vary, but check with your accountant!

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7 minutes ago, tibbyuk said:

Just incase you don't want to put the missus on as a shareholder, if you want to employ her and pay a salary, then it should ideally be comparable to market rates (I think this more counts for overpaying someone rather than under) and you need to just be able to prove she's doing as you say. E.g. If she's helping with the books, just have her access, some emails etc.

This was the advice given to me by my accountant, so your mileage may vary, but check with your accountant!

Agree - same view from my accountant. I did a job description etc to make sure I was paying an appropriate rate for the work being done.

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Phew, not just my accountant then!

I think as long as you can point to your missus tangibly doing something, and saying "here's the market rate, which is £20kpa, but she work's 1/4 of the time" then it's pretty defensible.

I do know the dividend route is more beneficial dependent on tax status, but my personal mortgage broker has made me promise to not put my wife on until we do our next 5 year remortgage on our home, as apparently it cuts down some lenders?

Once this is sorted I will look to put my wife on as a shareholder, most likely with A/B shares, on my main business (property is just the side hussle!)

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