Self Employed - Employing Daughter

clearwing

Hi all,
I am a self employed sole trader.
My 15yr old daughter works for me for app 4hours per week.
Packing orders, filing, labelling & general admin etc.
I would like to know if it is possible for me to pay her for this work and declare this on my self assesment tax return as a business expense.
I would not be paying her anything approaching minimum wage but just a small token amount to get her used to handling her own money.
She would not be near any kind of tax threshold etc

Is this as easy as it sounds or am I opening up a can of worms and creating problems for me as a self employed person, and does she need to make any kind of declaration.

In an ideal world I would like to pay her monthly as a standing order from my trading account to her account so everything is clearly documented.

Thank you

zzzLazyDaisy

Children under school leaving age are not entitled to national minimum wage, so that in itself is not an issue.

If you take her on as a part-time employee, you will have all the normal obligations re employment contract, holidays etc. Also after 2 years she will have the right not to be unfairly dismissed, and assuming she is still working for you once she reaches normal school leaving age, she will be entitled to national minimum wage by law.

McKneff

If she is working for you don't be so tight, pay her at least minimum wage. If you employed any other 15 year old you would have to pay them at least a minimum rate.

It's saving you a lot of work. How much per hour are you saving by not doing it yourself.

Youre her mum/dad, treat her with the respect you expect from her.

She would get a decent hourly rate from a supermarket working 4 hours on a Saturday.

clearwing

Hiya,
Thank you for the info.
Am upto pace with the employment law side of things (I think)
She would be empoyed as a part time/casual person, if I have it right part time people would not qualify for national minimum wage, would she have to work a certain amount of hours per week before that came into play?
Also her wage would most likely be in the low£100's certainly not £1000's would she or I need to do any more than me page her wage, would she have to make any kind of declaration etc

heretolearn_2

"if I have it right part time people would not qualify for national minimum wage, would she have to work a certain amount of hours per week before that came into play?"

nope, minimum wage has nothing to do with how many hours are worked, it depends purely upon someone's age.

£6.19 - the main rate for workers aged 21 and over
£4.98 - the 18-20 rate
£3.68 - the 16-17 rate for workers above school leaving age but under 18

At the moment your daughter isn't covered by it but as soon as she turns 16 you'll have to start paying her the above rate even if she only works one hour.

paddedjohn

Minimum wage plus holiday pay

Suewre

As a member of your family, if she lives in your home and helps in a family business, then the national minimum wage does not apply, even when she turns 16.

clearwing

Thank you for all the replies so far

So as I see it If she works for me for 4hrs per week at the rate of £3.68 per hour based on working say 40 weeks of the year (some weeks are traditionally very slow for me and I would not need her every week)
She would get a wage of £588.80 per year, payable from my trading account to her personal bank account
At this level does she or I need to do anymore than me pay and her receive the money, are there any deductions or other payments she or I would hae to make?
Thank you

Uncertain

I wouldn't normally suggest this but is this not all a bit theoretical?

We are talking about £10 per week here for a child who lives with you and you provide for. Can you not just buy her £500 pounds per year more clothes / presents / pocket money / meals out than you otherwise would if she is a good girl and helps Mummy out?

In any case, she has the same personal tax allowance as an older single person so unless she is earning about £7K per year elsewhere tax doesn't come into it.

Do we really think a 16 year old is going to take her Mum to a tribunal for unfair dismissal? If your relationship brakes down to that extent you have got far bigger problems!

Notmyrealname

clearwing wrote: »

Hiya,
Thank you for the info.
Am upto pace with the employment law side of things (I think)
She would be empoyed as a part time/casual person, if I have it right part time people would not qualify for national minimum wage, would she have to work a certain amount of hours per week before that came into play?
Also her wage would most likely be in the low£100's certainly not £1000's would she or I need to do any more than me page her wage, would she have to make any kind of declaration etc

You do not have to notify anyone you are employing her as her weekly wage will be earning below the Employers NI lower threshold. You would enter it as wages in your accounts and it is tax deductible. Even if she earned £5000 a year you'd not need to notify anyone HOWEVER WHAT MATTERS IS THE AMOUNT PER WEEK SHE EARNS and if it exceeded the lower threshold for NI of £107, you would have to register for PAYE as an employer with HMRC. So even though she would earn £5000 a year, if in any one week she earned over £107 in any one week you'd need to register.

However because she is still at school there are some very strict regulations that need to be complied with, especially in respect to weekend working and the times she can work from/to.

Uncertain

Notmyrealname wrote: »

...........if in any one week she earned over £107 in any one week you'd need to register.

However because she is still at school there are some very strict regulations that need to be complied with, especially in respect to weekend working and the times she can work from/to.

The OP is talking about 4 hours per week so as long as it is not more than two hours on any day but a Saturday she is fine!

Equally if the OP keeps below £25 per hour she is fine on that front too!

This is getting a bit OTT!