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Employing your spouse or family members

By Jennifer Adams, February 2021

Jennifer Adams considers how employing a spouse/civil partner can reduce a business's tax bill.

Running your own business can be exciting as well as challenging; as a business grows, there may be situations where an extra pair of hands is needed to help with the smooth running of that business. 

Employing a spouse/civil partner (or family member) not only enables the business owner to concentrate on maximising income, but paying them a salary can be one of the more efficient ways of reducing tax. 

Wholly and exclusively?

Tax relief for the payment will be allowed so long as that spouse/civil partner does some work 'wholly and exclusively’ for the purposes of the business. The payment must be commercially viable, and the amount realistic and not excessive for the work undertaken. 

In a basic situation involving a sole trader business, excessive

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