If you run your own business, it’s tempting to bring in your own family into the company. But it’s important to think through both the positive and negative implications of employing your family.
Employing your own family members can help to reduce the overall tax bill for the whole family unit. And, as an added bonus, some tax-effective benefits (such as having a work mobile phone) can be provided to employees but not to non-employed family members.
But there are other implications to take into account before you make a decision.
If members of your immediate family have no other source of income, you might want to think about employing them within a family business. This allows them to utilise their tax allowances against pay, while the salary itself becomes an allowable expense against the company’s profits.
There are conditions and rules to abide by, however:
If employing your nearest and dearest and creating a family-run business is on the cards, please come and talk to us. We can discuss your plans for taking on family members in the business, and making sure that they’re paid correctly and efficiently.
We can also help you work out any tax benefits that may arise from employing members of your family in the business.
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