Paying your child for work in the business.

[Re8ecca]

This is not a tax dodge question; I've just set up a small business (limited company) currently only myself working in it. I'm looking at paying my 13 year old £10 a week for approx 1hour of cleaning instead of a self employed cleaner the going rate for an adult. I'm reluctant to go through all the admin of setting him up as an employee though for that tiny sum/ role. Can anyone advise on how best to go about it please? I feel sure there must be a way, similar to paper girls/boys. As I say, this is not about transferring money to my child's name for tax purposes just confering a slight advantage to us both.

 

[Newchodge]

This is not a tax dodge question; I've just set up a small business (limited company) currently only myself working in it. I'm looking at paying my 13 year old £10 a week for approx 1hour of cleaning instead of a self employed cleaner the going rate for an adult. I'm reluctant to go through all the admin of setting him up as an employee though for that tiny sum/ role. Can anyone advise on how best to go about it please? I feel sure there must be a way, similar to paper girls/boys. As I say, this is not about transferring money to my child's name for tax purposes just confering a slight advantage to us both.

Do you already run payroll?

 

[Clinton]

I wouldn't worry about getting all formal. Pay him the £10 a week and call him an independent contractor. Let HMRC come chasing you under IR35 if they really want to!

I have a client currently undergoing an IR35 inspection. I keep getting updates. HMRC are such idiots! It's taken six months and they've hardly moved an inch. They're over worked and understaffed and are unlikely to come after you or your son.

 

[Ziggy2024]

To expand on Cyndys answer, if you already have a payroll set up (most director only companies do) then you have no choice but to put them on the payroll.

If you haven't then you don't have to have a payroll scheme if all employees earn less than £123 per week and have no other job. You would therefore be fine to pay £10 per week assuming a 13 year old doesn't have a second job!

 

[Daybooks]

I wouldn't worry about getting all formal. Pay him the £10 a week and call him an independent contractor. Let HMRC come chasing you under IR35 if they really want to!

I have a client currently undergoing an IR35 inspection. I keep getting updates. HMRC are such idiots! It's taken six months and they've hardly moved an inch. They're over worked and understaffed and are unlikely to come after you or your son.

You may have missed off under-educated. I agree with your sentiment but Jim Harra has delivered the most incompetent organisation in its history. His knighthood [perhaps spelled Cur?] is as worthy as Paula Vennells’ CBE was and is a disgrace to those who truly merit recognition. I trust we’ll see the same outcome for equally despicable performance.

The danger is that the badly written algorithms, specified by someone who is clueless and programmed by five year olds [aka Post Office and Fujitsu] will only be realised in a court of law. In the meantime this potential loss of revenue of £nil will inextricably be pursued with the help of AI tools.

It is refreshing to know that the legal profession hold HMRC with equal regard as the accounting profession.

But alas it is difficult to predict the outcome of idiocy.

 

[eteb3]

you have no choice but to put them on the payroll.

Even if son is self-employed?

Or is a director who is also the mother of the contractor too much in control of the work for that?

 

[Newchodge]

Even if son is self-employed?

Or is a director who is also the mother of the contractor too much in control of the work for that?

A 13 year old cleaner who works under the control of his mother is a self-employed contractor? Please!

If payroll is already being run it would take less than a minute to include him. If it is not being run, there is no need to apply payroll.

The bigger issue is employer liability insurance, but that should be in place whatever his tax status.

 

[fisicx]

Or keep them off the books and give them some pocket money in exchange for emptying the bins.

 

[Paul Kelly ICHYB]

give them some pocket money

Yup!

'm looking at paying my 13 year old £10 a week for approx 1hour of cleaning instead of a self employed cleaner the going rate for an adult.

What's the going rate for an adult? £15? £20?

 

[Re8ecca]

Do you already run payroll?

No I don't already have a payroll otherwise that would probably be straightforward when its a whole load of admin for such a tiny role/sum it seems a bit much. I know the obvious thing would be to just give him pocket money and keep it out of the books entirely but I'm not earning any income from the business yet so my personal budget is very tight. T.I.A

 

[Newchodge]

No I don't already have a payroll otherwise that would probably be straightforward when its a whole load of admin for such a tiny role/sum it seems a bit much. I know the obvious thing would be to just give him pocket money and keep it out of the books entirely but I'm not earning any income from the business yet so my personal budget is very tight. T.I.A

You only have to put him on payroll if you already run one. As you do not, simply give him the moeny and record it in your accounts. He may feel quite grown up if you also give him a payslip.

 

[Re8ecca]

Yup!


What's the going rate for an adult? £15? £20?

That's right

 

[Re8ecca]

To expand on Cyndys answer, if you already have a payroll set up (most director only companies do) then you have no choice but to put them on the payroll.

If you haven't then you don't have to have a payroll scheme if all employees earn less than £123 per week and have no other job. You would therefore be fine to pay £10 per week assuming a 13 year old doesn't have a second job!

Thanks, that sounds sensible

 

[Re8ecca]

You only have to put him on payroll if you already run one. As you do not, simply give him the moeny and record it in your accounts. He may feel quite grown up if you also give him a payslip.

Great, thats easy enough

 

[Re8ecca]

I wouldn't worry about getting all formal. Pay him the £10 a week and call him an independent contractor. Let HMRC come chasing you under IR35 if they really want to!

I have a client currently undergoing an IR35 inspection. I keep getting updates. HMRC are such idiots! It's taken six months and they've hardly moved an inch. They're over worked and understaffed and are unlikely to come after you or your son.

Thanks, you're right I'm small enough to be beneath the notice of HMRC regardless of what I do, just prefer to do things the right way as much as possible