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Can I pay my Nephew as a Contractor

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  • 06-08-2014 10:33am
    #1
    webdevdude
    Registered Users Posts: 6 ✭


    I have a Limited Company and my Nephew (he's 15) has been doing some coding for me for the past few months. We've been working on a project and he's been helping out after school, at weekends, over holidays, etc. It's something he enjoys. At the time cashflow was bad so he agreed to be paid at a point in the future.

    The company cashflow situation has recently improved and I would like to pay him for the work done to date. I have recorded all hours.

    Can I treat him as a contractor and just give him a cheque ? or do I need to register him as an Employee of the company ? He's going back to school after the Summer and is heading into Exams so he won't be working for me in the future.
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    #2
    CIARAN_BOYLE
    Moderators, Sports Moderators Posts: 14,599 Mod ✭✭✭✭CIARAN_BOYLE


    webdevdude wrote: »
    I have a Limited Company and my Nephew (he's 15) has been doing some coding for me for the past few months. We've been working on a project and he's been helping out after school, at weekends, over holidays, etc. It's something he enjoys. At the time cashflow was bad so he agreed to be paid at a point in the future.

    The company cashflow situation has recently improved and I would like to pay him for the work done to date. I have recorded all hours.

    Can I treat him as a contractor and just give him a cheque ? or do I need to register him as an Employee of the company ? He's going back to school after the Summer and is heading into Exams so he won't be working for me in the future.

    Will he register himself as a contractor and manage his tax exposure himself?


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    #3
    kitchenkid
    Registered Users Posts: 78 ✭✭kitchenkid


    you can give anybody a tax free gift of 3000 in any tax year - why don't you just give him a gift? I am presuming the amount would not be more than this limit.....then there is no need to think about tax and prsi etc.


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    #4
    Larry Wildman
    Banned (with Prison Access) Posts: 1,460 ✭✭✭Larry Wildman


    kitchenkid wrote: »
    you can give anybody a tax free gift of 3000 in any tax year - why don't you just give him a gift? I am presuming the amount would not be more than this limit.....then there is no need to think about tax and prsi etc.

    Except that wouldn't be a gift. It's in respect of work. And it would be from the OP's own "after tax" funds.

    The kid would be deemed employee - Contracting not really an option given the circumstances.

    Just do it through payroll - There'll be no tax anyway.


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