PAYE and family employment

Z

zooned

Guest
I am self employed as a sole trader. My wife is employed by me as an administrator for our small business. She is a PAYE employee and as such receives a tax credit cert every year outlining her credit entitlements. I submitted a P35 for 2007 and after deducting her credits from her tax liability she had no tax to pay.
I am now in the process of filing my tax return for 2007 and my accountant tells me that, as she is my spouse and employed by me she is not entitled to any PAYE credits, so she will have to pay tax on her full earnings.
Has anyone else had experience of this happening.
It seems to me that if you employ your spouse then they are discriminated against because they are not entitled to any PAYE credits. My wife plays an important part in running the business but it seems she has no worth in the eyes of revenue and the government.
 
The employed spouse is not entitled to the PAYE credit (currently €1,830). She is, of course, entitled to her share of the ordinary married credits should you jointly choose to allocate them to her. Of course if you presently have those, you are merely moving them around and no net tax saving would occur.
 
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