Question: I currently work full-time and am part-time self-employed with my own business as a personal trainer. My wife has now qualified to be an instructor and will need to start paying tax on her earnings. She already works 4 days a week as a PE teacher and will be going full-time in the New Year. Can she pay tax through my business for all her fitness/instructor work as we will be working together a lot or will she need to set herself up as small business? – asks Jamie Hardgrave.

Answer by Joe O’Neill, personal tax manager at chartered accountants Moore and Smalley

Assuming that your wife is an employee, she will pay PAYE on her salary as a teacher. Full time employment will not affect this. If she is employed by her husband’s business, the business will have to pay employer’s National Insurance and subsequently set up a PAYE scheme, and she will also then pay PAYE on the salary paid.

Under self-employed status – either as a sole trader or in partnership – her tax will be collected via self assessment and annual tax returns are required. She will also have to notify the Revenue within 3 months of commencement and will be responsible for settling her own tax liabilities.

Furthermore, the wife may only use the same business name as her husband if she is either employed by him or they are in partnership.

If a partnership was established each partner is still responsible for paying their own tax. However, they can use a joint partnership account if desired.

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