Daughter has set up new business in our home. Are we eligible for any benefits?

400ixl

Maybe contact the local council to see if there are any business development grants or other assistance available through those channels. 

Potbellypig

400ixl said:

Maybe contact the local council to see if there are any business development grants or other assistance available through those channels. 

Not sure there are many business grants to pay Mums electric bill.

tightauldgit

MM2002 said:

Hi All
Our Daughter has set up a business as a lash/beauty technician in our garage that I have converted into a salon. She is doing amazingly well for a 17 year old, and the business is now in its 2nd year(Super proud parents!!)

We have recently completed her first self assessment, and as expected for a new business after set-up & product costs etc she is under the threshold for any tax payments this year.

As the salon is setup in the garage she has heaters set up that in these coming winter months are on for anything between 8-12 hours a day, obviously costing us, her parents dearly. Are we entitled to any rebate from OUR tax/electricity bill as with the price increase lately this is going to start hitting us hard and if so how do we claim? 

Thanks for any replies in advance

MM2002

Of course you're not entitled to a rebate on your electricity just because you are using more. 

You need to charge your daughter for what she is using and she can then account for that through her business reducing her profit and any future tax she pays.  

prowla

MM2002 said:

Hi All
Our Daughter has set up a business as a lash/beauty technician in our garage that I have converted into a salon. She is doing amazingly well for a 17 year old, and the business is now in its 2nd year(Super proud parents!!)

We have recently completed her first self assessment, and as expected for a new business after set-up & product costs etc she is under the threshold for any tax payments this year.

As the salon is setup in the garage she has heaters set up that in these coming winter months are on for anything between 8-12 hours a day, obviously costing us, her parents dearly. Are we entitled to any rebate from OUR tax/electricity bill as with the price increase lately this is going to start hitting us hard and if so how do we claim? 

Thanks for any replies in advance

MM2002

MM2002 said:

prowla said:

No quite answers to the question, but some things which need to be considered.

• Has she got public liability insurance?
• I would think that the benefits would be in her ability to offset costs against tax due.
• Also, do your mortgage and house insurance allow running a business from the premises?

Hi, yes she has insurance and i have made mortgage and house insurance aware and am paying extra for this. Again, can I claim any of this as its not MY business, but costing ME?

OK - just wanted to be sure that there wasn't a nasty surprise waiting for you, for example if you were to make an insurance claim and the insurer contested it.

It certainly wasn't intended to be pointing a finger or anything and good on DD for having the gumption to start her business.

I think that the only way you could get money out of it is to become a partner and claim use of house against the company, a portion of bills, and so-on; many small companies do this (though typically knowledge workers operating from a home office).
However, those would comprise deductions from tax due, not rebates.

I don't think that you gifting premises and energy to DD is tax-deductable.

silvercar

I thought 17 year olds needed to be in education or recognised training. Good on your daughter if she is doing this alongside her studies.

koru

In case the OP is still thinking about this, can I add the following:

If the parent chooses to subsidise the daughter by letting her business use power free of charge then this will create business profits that don't really exist. As she will pay tax on those profits, 20% of the subsidy is going to the government as unnecessary tax. (Assuming the profit is taxed at basic rate income tax.) Maybe also some unnecessary NI.

So, it might be better to subsidise the daughter in a different way. Recharge her for all relevant costs. She can claim a tax deduction against business profits, so the taxable profits will now reflect the true profits. As long as you only charge her costs you incurred, you shouldn't be taxable on the amounts she pays you.

If you want to subsidise her, give her a gift, so that she keeps the full subsidy and 20% of it doesn't go to the government. If you want the gift to be equal to the amount you charged her, that's fine.

Ideally, discuss with an accountant, as I'm making a number of assumptions that are probably right, but might not be.