Running a business:
Employing your children
In general, if children obtain income from funds provided by a parent, then the income is taxed on the parent rather than the child.
If children receive a salary from the family business, however, it should be taxed as their own earnings and not those of the parent, so long as:
- They do genuinely work in the business (watch the rules for children's hours of work);
- They are paid a commercial rate for the work that they do (we would suggest no more than the national minimum wage); and
- The children actually receive the cash themselves, it is not paid to the parent.
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Where next?
Within Remuneration ...
- Salary or dividend?
- Employing your spouse or partner
- Remunerating your employees
- Enabling employees to participate in profits
- Pension schemes
Within Running a business ...
- Accounting systems
- Financial information
- Your business premises
- Remuneration
- Business risks
- PAYE
- VAT
- Business taxes
General ...
