You are missing the fact that you also pay Corporation Tax on dividends. There is marginal difference between this way or PAYE since 2017.
If he is indeed using his spare bedroom as an office and the carpet was worn, then I see no reason why this wouldn't be a valid expense. The same as employer would deduct that cost if the office he or she works in needs repair.
Business owner can hire whoever he or she wants if it is needed for business. I am sure every business owner has a spouse and take her on the books to save few quid of tax. You can't be serious.
If you are not aware, everyone has personal tax allowance. If the spouse is not working and can help with the business, I see no reason why he or she couldn't be hired.
I think you are looking at this from a perspective of a hurt employee. Start a business one day, it's so simple, you pay virtually no tax and you'll get a spouse and new carpet!
Biting the hand that feeds IT
