[choice.clean]

Here is the story of my inspection by the inland revenue some interesting points for those of you employing.
A month ago the inland revenue wrote to me to inform me of visit by national minimum wage inspector.
(please note all references to nmw in this post mean national minimum wage)
Anyway as I like to be on top of things and had been warned by my accountant inspection could be imminent  had joine the federation of small business’s as they insured against accountancy cost of inspection and gave advice lines to help. So I though I was all set.
Thinking about it though I realised that my wife was being paid £4000 for tax reasons how would she stand on nmw legislation. We run a ltd company and she is company secretary and I am director. So decided to preempt situation by phoning federation of small business’s and inland revenue nmw helpline.
Both replied over phone yes wife does come under legislation and shoul be paid nmw.
NOW I START TO PANIC OVER PROSPECTIVE TAX BILL. Decide to see if anyone else has had problem so trawl internet for answer. 3 hours later come across obscure reference by London accountants that says now inland revenue has reviewed nmw and wives as company secretarys nmw does not apply.
SO I THINK TO MYSELF I WILL USE THIS WITH INSPECTOR IF HE RAISES ISSUE. Also realise that we have had lady from inland revenue to help us do end of year paye and she had never questioned this with us. So now have some ammunition, but decide to keep looking on internet. Lo and behold eventually arrive at inland revenues own site which states at bulletin 50 that nmw does not apply to wives as company secretarys providing wife does not have contract.
   Decide to rephone business federation to re ask they are sure I have it wrong initially, remember they are supposed to be on small business’s side. Eventually after ½ hour of banter there expert says I am not an expert on this I will get a tax expert to phone you back! After picking myself up of floor say yes please.
   While I am waiting for this expert to phone me back rephone inland revenue nmw helpline ha ha
Ask same question yes they say wife must be paid nmw. Direct them to own web page guy on phone says I am not an expert on this !!!!! I will get someone to phone you back.
   After ½ hour guy from nmw helpline phones me you are right after all.
   1 hour later guy from federation of small business’s phones up you are right. Must admit told him straight how can you say you are here to help small business’s when you can’t get this fundamental bit of info right.
   Anyway guy from inland revenue came seemed a bit nervous to me and didn’t even want to see pay records for me and missus (I wonder why could someone have told him not to go there I wonder, was tempted to discuss with him but had already been warned don’t discuss anything with these guys as you might slip up.)
   I think the moral of this story is don’t take no for an answer and never stop fighting your corner hope this info might be of use to some of you.

[Ian Rochester]

So your letterhead now states:

Choice Clean
Window cleaner
NMW expert

Well done, some good digging done there.

[Trevor Knight]

This isn't the first time I have heard the FSB have not been so helpful. Its worrying that an issue as important as this took such hard work to resolve!

What worry's me even more is I am also a member of the FSB 

[Paul Coleman]

Here is the story of my inspection by the inland revenue some interesting points for those of you employing.
A month ago the inland revenue wrote to me to inform me of visit by national minimum wage inspector.
(please note all references to nmw in this post mean national minimum wage)
Anyway as I like to be on top of things and had been warned by my accountant inspection could be imminent  had joine the federation of small business’s as they insured against accountancy cost of inspection and gave advice lines to help. So I though I was all set.
Thinking about it though I realised that my wife was being paid £4000 for tax reasons how would she stand on nmw legislation. We run a ltd company and she is company secretary and I am director. So decided to preempt situation by phoning federation of small business’s and inland revenue nmw helpline.
Both replied over phone yes wife does come under legislation and shoul be paid nmw.
NOW I START TO PANIC OVER PROSPECTIVE TAX BILL. Decide to see if anyone else has had problem so trawl internet for answer. 3 hours later come across obscure reference by London accountants that says now inland revenue has reviewed nmw and wives as company secretarys nmw does not apply.
SO I THINK TO MYSELF I WILL USE THIS WITH INSPECTOR IF HE RAISES ISSUE. Also realise that we have had lady from inland revenue to help us do end of year paye and she had never questioned this with us. So now have some ammunition, but decide to keep looking on internet. Lo and behold eventually arrive at inland revenues own site which states at bulletin 50 that nmw does not apply to wives as company secretarys providing wife does not have contract.
   Decide to rephone business federation to re ask they are sure I have it wrong initially, remember they are supposed to be on small business’s side. Eventually after ½ hour of banter there expert says I am not an expert on this I will get a tax expert to phone you back! After picking myself up of floor say yes please.
   While I am waiting for this expert to phone me back rephone inland revenue nmw helpline ha ha
Ask same question yes they say wife must be paid nmw. Direct them to own web page guy on phone says I am not an expert on this !!!!! I will get someone to phone you back.
   After ½ hour guy from nmw helpline phones me you are right after all.
   1 hour later guy from federation of small business’s phones up you are right. Must admit told him straight how can you say you are here to help small business’s when you can’t get this fundamental bit of info right.
   Anyway guy from inland revenue came seemed a bit nervous to me and didn’t even want to see pay records for me and missus (I wonder why could someone have told him not to go there I wonder, was tempted to discuss with him but had already been warned don’t discuss anything with these guys as you might slip up.)
   I think the moral of this story is don’t take no for an answer and never stop fighting your corner hope this info might be of use to some of you.

Apart from all the other issues, surely the NMW is an HOURLY rate.  So long as you can show that the 4 grand was earned in about 700 hours (or less) then not a problem.
I'm not an expert in this though so I'll get someone to phone you back   

[choice.clean]

correct it is an hourly rate but how many hours do you put down on your tax credits claim
interesting document as inland revenue controls it and you have to be working i think 24 hours to claim do you see the problem if you tie the two together

[Paul Coleman]

correct it is an hourly rate but how many hours do you put down on your tax credits claim
interesting document as inland revenue controls it and you have to be working i think 24 hours to claim do you see the problem if you tie the two together

Ok now.  I see the issue has wider implications than were first apparent to me.  So for NMW purposes she needs to be working no more than about 700 hours per year but to claim tax credits, she needs to be working at least 1,248.  Can the tax credit claim be made on your working hours rather than your wife's?  Or doesn't it work like that?  I'm not familiar with family tax credit as I have no children.

[choice.clean]

exactly but if you miss it as i did could be in a real fix if inland revenue put 2 and 2 together, so be careful everyone there out there and they get a bonus for finding faults in your systems