Insights
As a sole Trader you may have a spouse/partner and/or other relatives involved in the business or practise in some manner, e.g. Accountant/Doctor whose spouse works as a receptionist and assistant in the practise.
A spouse or civil partner working as an employee of a sole trader in return for Schedule E remuneration from the business/practise is not insurable for PRSI purposes in respect of the remuneration. This means that such a spouse/civil partner does not build up any State Pension (contributory) entitlement from such employment, unless they are paying a voluntary PRSI contribution.
The Sole Trader, as their employer, can establish an employer sponsored Occupational Pension Scheme for their spouse/civil partner working in the business for schedule E remuneration from the business or practise. There are talks about adding additional requirements in September 2018.
This gives the Sole trader an opportunity to:
- Make tax deductible contributions for their spouse/civil partner in excess of the limits which would apply to personal contributions made by their spouse/civil Partner.