how young can you officially start a business

COOLTRIKERCHICK

i have a 15 year old and 14 year old son,

who want to start their own business.

it will only be for a few hours a week,



so was just wondering where they stood, when it came to tax, obvioulsy they will not be allowed to have a business account at their age etc, but they wil be paid by cheque etc

Rolo_Tomasi

There is no minimum age when it comes to tax so they will be fully taxed on their earnings but they will each have their own personal allowance which will reduce any liability. I thinks the main issue would be proving that it is them that is earning the income - not you.

There are specific rules which limit the amount of work young people can do and often local authorities may have their own rules so it is worth checking with them.

They would not be able to operate as a Limited Company as directors must be at least 16 therefore the only possibility is for them to be sole traders/partnership.

I dont think that tax is going to be the issue. The main problem is that they are not old enough to enter into contracts in their own right and most businesses have to deal with some sort of contract.

ukbill69

No reason why they cant start a business. But you got to over look there accounts and things like that, as 14/15 year olds are not the best at even keeping there own hygiene in order really, so would you expect them to run a company. But good luck and you never know they might be richer than you before there 18th birthdays.

COOLTRIKERCHICK

ukbill69 wrote: »

No reason why they cant start a business. But you got to over look there accounts and things like that, as 14/15 year olds are not the best at even keeping there own hygiene in order really, so would you expect them to run a company. But good luck and you never know they might be richer than you before there 18th birthdays.

lol.... i know exactly what you mean:rotfl:

I bet they will be driving round in new cars, and i will be still driving round in the works vans and my fairthfull old mondeo...lol...

They have permission from the school to work for me x amount of hours per week, but they might help me out for the odd few hours every now and again.

There will be no contracts involved,

There is a side-shoot oppertunity steming from my business, which to be honest would ideal for them, not much work, and not that much money to be honest to start with, but they are interested in the idea, and it wouldnt take up that amount of time, so it would not interfere with school work etc.

Obviously i will oversee things.... and help out, what parent wouldnt.

fengirl_2

Just to emphasise, they wouldnt register for tax unless their profit was likely to exceed 6475 in the current tax year.
Also, remember that a minor cannot enter into a contract, so anything like that would need to be done by you.

PlutoinCapricorn

There is an MSE member called Bradc who mentioned his successful online businesses in July 2009: he was 16 at the time!

COOLTRIKERCHICK

fengirl wrote: »

Just to emphasise, they wouldnt register for tax unless their profit was likely to exceed 6475 in the current tax year.
Also, remember that a minor cannot enter into a contract, so anything like that would need to be done by you.

the profit would be nowhere near that, in the first year, but they would need to notify the tax office of their trading yes? same as any other person who started their own business

fengirl_2

No, they dont notify HMRC unless they are chargeable to tax. This applies to everyone. Most people would register as self employed at the start of their business because of their liability to pay class 2 NIC. But under 16's are exempt from NIC, so they dont register.

Charity_Dalek

fengirl wrote: »

No, they dont notify HMRC unless they are chargeable to tax.

Could I please just clarify the position on this. I was of the understanding that anyone earning as a result of being self employed was required to register for income tax with HMRC. This applies to all age groups, even under 16's and is irrespective of the level of earnings.

I have just register my son who is 17 (still in full time education) and earns less than the tax limit, but according to HMRC he may get a £100 fine because he did not register with them within 3 months of earning.

Rolo_Tomasi

The 3 month rule was withdrawn this year - you now have to tell the Revenue 'promptly'. The difference with your son is that he is over 16 therefore liable for class 2 national insurance - the op's children are not.

I still think that as an 'offshoot' to an existing business which will have to be managed and overseen by the op then the Revenue could assess the income on the parents.

dzug1

COOLTRIKERCHICK wrote: »

There will be no contracts involved,

There most definitely will - even if not formal written ones any transaction for money is an implied contract.

You might actually be better employing them to do the work as part of your own business