There can sometimes be a problem in justifying a reasonable level of remuneration, especially for spouse shareholder/directors. Remuneration must be paid wholly and exclusively for the purposes of the trade but there is usually little difficulty in justifying a nominal salary on the basis that a few hours a week are worked. Of course, paying a salary in excess of the lower earnings limit but below the earnings threshold (between £79 and £91 per week for 2004/05) means that there is no tax or NI payable on this sum.
In addition, a quirk of the legislation means that the recipient is potentially entitled to statutory maternity pay and statutory sick pay. Also, they will be entitled to a state pension, based on earnings of approximately £11,000. Consequently, employing family members can be hugely advantageous to the individual in the long run.