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Sole Trader Help

  • 05-06-2011 8:27am
    #1
    Slim Shady
    Registered Users, Registered Users 2 Posts: 28 ✭


    I know a 15 year old who wants to setup a sole trader business in his mothers name(she is not working) but she wont be taking any pay so it won't affect her husbands pay or their tax credits in general. He wants to know can the business pay no one and just build up money in the bank until he's 18. And does he have to pay tax on the business profits? I thought it might be the 12.5% corporate rate. But I'm not sure and don't want to give bad info.


Comments

  • #2
    DubTony
    Registered Users, Registered Users 2 Posts: 3,267 ✭✭✭DubTony


    As a sole trader, all profits would be liable at the personal tax rate. It will affect the tax liability of the family. Better to set up a company. All profits will be at the 12.5% tax rate. If there are no wages paid, there won't be any tax liability in that area. However there are compliance issues with company returns and the like. The kid should talk to an accountant.


  • #3
    ssbob
    Registered Users, Registered Users 2 Posts: 2,736 ✭✭✭ssbob


    DubTony wrote: »
    As a sole trader, all profits would be liable at the personal tax rate. It will affect the tax liability of the family. Better to set up a company. All profits will be at the 12.5% tax rate. If there are no wages paid, there won't be any tax liability in that area. However there are compliance issues with company returns and the like. The kid should talk to an accountant.

    Also need to bear in mind who the company directors are as there may be social welfare/pension issues in the future.


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