Employing family members and voluntary staff

Employing your spouse

If you employ your spouse, you should decide in what type of role you want to employ them, ie a managerial or non-managerial position.

Get professional advice about the terms of your spouse's work and ways of minimising your own tax bill and that of the business, and make sure you stay within HM Revenue & Customs rules. You must include your spouse in all necessary paperwork for PAYE (Pay As You Earn) and National Insurance contributions (NICs).

It's a good idea to:

• Keep adequate records for work done by your spouse.
• Protect your spouse's eligibility for pension and state benefits.
• Build up a pension for your spouse.
• Obtain advice from a tax specialist or HM Revenue & Customs about the tax implications if you share the business profits between the two of you - if your spouse is a partner, or if you split your workload betwen you and your spouse.
• Look at tax benefits for your spouse, such as company cars with low emissions, to help keep your family's combined tax liability low.

For advice on employing your spouse speak to your local Business Link or contact a tax specialist.

Subjects covered in this guide

• Introduction
• Family employees - consider your motives
• Family employees - minimising business risks
• Preventing communication breakdowns
• Employing your spouse
• Employing younger family members or volunteers
• Voluntary staff - points to consider
• Voluntary staff - contract rights, benefits and allowances
• Health and safety issues
• Tax reporting requirements - young, old or voluntary staff
• Here's how our business overcame the pitfalls of employing family members

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