T17/W3 - NI on spouse wages

If a spouse is employed in a business, he or she can be paid up to £4745 per annum as wages (£4615 in 2003/2004), without any tax arising, provided he or she is not employed elsewhere. In addition, if they are paid between £79 per week and £91 per week (2004/2005) (£77 and £89 respectively in 2003/2004) no National Insurance will be payable. The spouse will receive a credit for National Insurance purposes, which will count towards their contributory benefit record and is deemed to have been paid £10,800 for State Second Pension. Even though no tax or NI is payable, you will still need to fill in a P14/P60 at the end of the year and send it to the Inland Revenue so that they can make a note of this.

Do note, however, that wages may only be paid to a spouse at a reasonable rate for services actually provided.

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