Many business owners, with energetic children, may want to offer their offspring a chance to gain some work experience and shift the funding of their children’s expenses from after-taxed income to a business expense.
You can employ young people aged 13 or over, but only part-time. Once they reach the school leaving age, they can work up to a maximum 40 hours a week. National
Minimum Wage rates will also have to be considered for those of at least school leaving age.
From age 16 you may need to consider PAYE regulations and from age 18 adult employment rights and rules will apply.
To secure tax relief and avoid complications if you employ young family members you must:
- avoid special treatment in terms of pay, promotion and working conditions,
- make sure tax and National Insurance contributions are still paid
- follow working time regulations for younger family members,
- have employer’s liability insurance that covers any young family members,
- check if you need to provide them with a workplace pension scheme.
The first item on this list is critical. If challenged by HMRC, you will need to be able to demonstrate that wages paid reflect time worked and at a rate that is commercially justified.