I was reading another sub about cost of childcare and NI contributions whilst on a career break to raise kids. I wondered if I was earning day £45k a year, could my wife become self employed and I pay her the minimum £7500 out of my take home pay so she on paper earns the minimum for NI contributions without paying tax and also the minimum required to access free childcare at 3 years old as opposed to 4?
6 comments
Talk to an expert…
I think there’s some allowance for raising children counting for NI contribution for pension purposes.
This might be it: https://www.gov.uk/government/publications/national-insurance-credits-for-adults-who-care-for-a-child-under-12-fact-sheet
Ask an accountant dude, not reddit.
We’ve seen recently how quickly things can change regarding tax. Are you going to keep upto date with all that?
*If you’re self-employed and started your business less than 12 months ago, you can earn less and still be eligible for 30 hours free childcare.*
Couldn’t she just register a company to go around the earning criteria?
Talk to an expert though
Yeah, Just set up a company and “employ her”.
So long as she’s caring for a child under 12 she’s entitled to NI credits which she gets by claiming child benefit.
Claiming a non-existent self employment for the purposes of accessing free childcare would be pretty obviously fraudulent.
Claim Child Benefit and she automatically gets Class 3 contributions towards her State Pension until the child is 12.
She can also transfer some of her personal allowance to you.
She could always set up a little cleaning business –
I mean if you were her only client…. But I didn’t say that