Hi,

I have a query which isnt very straighforward so looking for any help at all!

I am working with a couple with 3 kids - he is a self employed farmer who is terminally ill and now in receipt of IB and DLA under special rules. I was assisting his wife with a carers allowance claim and am unsure as to whether money she gets through the business would be classed as earnings for this benefit.

she told me that she gets £450 pm (no tax or NI paid on this) transferred into her personal acc from the business each mnth. she thought this was housekeeping (is used for this) but accountant says it is for helping out ie admin, paperwork and comes under casual labour expenses.It is not in her name in the books but the accountant said if they were ever assessed then they would have to provide names of people who came under this and she would be one of them. Would this be classed as earnings for CA?

ta saima

one would have thought so - if the business accountant says she's classed ans an employee... but best off asking an employment lawyer..

It's quite common for s/e earners to 'employ' their partner for tax reasons, though they may not do much work in the business (and her earnings in this case should actually have NIC & tax deductions). However, if he's getting IB, then he shouldn't be working (except permitted work) , so is the farm a going concern? If not, he's got no income to pay her. If he's employing others for the work to continue I see no reason why she can't resign her job to look after him. Are the figures you quote by any chance based on a previous year's accounts, eg 2006? If so, there's been a change in circs since then.....but this is a collision between what's best under bens regs and what's best under tax regs.