Employing your spouse? You are still an employer
I met a lovely chap this week, he was a doctor and I had met with him to talk about a workplace pension for his team of medical secretaries.
Whilst we were chatting, he mentioned that he, like many other GPs and consultants, employed his wife as an administrator. His accountant had advised him that this would be beneficial for tax purposes. What he hadn’t realised, was that because he paid his wife more than £10,000 a year, he would also need to set up a workplace pension for her.
As this arrangement had been in place for sometime (before April 2012), his Staging Date, the date by which he has to set up a pension scheme, could be anywhere between 1 June last year and 1 April 2017, depending on his PAYE reference.
This doctor has the same duties to his wife as a traditional business, such as coffee shop or estate agent, with employees. He must set up a workplace pension scheme enrol his wife, deduct pension contributions from her pay and pay employer contributions on top of her salary.
If he fails in this duty, then The Pensions Regulator has the power to levy some pretty hefty fines.
Hopefully, I made him aware in time, and his staging date hasn’t yet passed, but I’m still waiting to hear.
Even if his wife earned less than £10,000 a year, he would still need to take some action. See my earlier blog “I don’t think any of my staff are eligible for Auto-Enrolment, do I need to do anything?”
If you think you might need to set up a scheme, or would like to talk through your circumstances, please click here to get in touch. We’ve got lots of useful information and guidance on our pensions website if you need it: http://www.aefasttrack.com/