Registering A Business For A Minor (Under 16)
- posted by: Steven Parkling on 2016-01-21
- tagged:
legal, taxes, business-registration, united-kingdom, business-structure
- score: 4
I have recently started making a business to earn some money and was looking through the legal implications before I launch the business , however , I was looking at the HMRC website for registering as a sole trader and it says I need a National Insurance Number (Found Here):
To become a sole trader you must:
have a National Insurance number
register for self-assessment with HM Revenue and Customs (HMRC)
trade under your own name or choose a business name
However I am a minor (under 16) so I thought maybe my dad could register and I could operate the business.
I have looked through the HMRC website and can’t see anything about it.
Is this legal?
And if it is; What do I do about taxes?
Answer 12553
- posted by: Marcus D on 2017-04-24
- score: 1
A few thoughts, prefixed with ... I am not a solicitor, or accountant, but have experience of starting and running small companies ... please get some legal advice to confirm or deny this.
- HMRC excludes minors from being company directors (though the nearest I can find on hmrc.gov.uk is here, but not quite as specific as the previous website list)
- There seems to some disagreement if children can own shares in UK companies. This site says they can, this site has an argument suggesting maybe they cant be. My personal experience says they can, as I did from the age of about 12 years of age, but maybe my dad held them in trust for me, but I don't believe so.
- There seem to be some consideration that you should make with regard to the S660 rules, which attempt to stop individuals spreading their tax by passing income to other family individuals. But this really isnt your case, so they may not apply.
- I would look seriously at Trusts, as a tax and legal vehicle that your Dad can 'own' the business in trust for you. Clearly you would want some sunset clause on it, so that when you reached 18, that the trust would have a tax efficient way to wind up and convert (perhaps) into a Limited company with yourself as director. There are many many types of trusts within HRMC rules and their rules keep changing, so get some advice on this!
Good luck!
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