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Advice please! Registering a business for a minor(11 Posts)
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Thank everyone who is commented
Yeah it's really only because we thought you had to register in some way to be able to get the stock he would need to continue with it so it looks like (from what everyone has said) rather than focusing on how to make it a legit business, we need to just focus on which wholesalers we can use and not register/declare until he reaches the limit. For someone that asked, we don't need liability insurance if the items are prepackaged which they are.
Wholesalers tend to ask for a VAT number simply to prove it's a genuine business. They'll usually accept other "evidence" if you tell them the business isn't VAT registered. They just want to make sure that applicants aren't simply pretending to be businesses to access the wholesale market. Of course, some wholesalers are more strict than others - some won't care and supply to virtually anyone, others are very strict and there are some that won't supply unless you have a physical shop!
He can want up to £1000 a year without reporting it so let him just get on with it while he does that?
Yes that does look like it will only complicate the situation, especially as it's only a small venture. Thank you so much for all your help, you've definitely been more helpful than the internet! I will have to look more into how we can get a costco/cash and carry membership as opposed to a vat number. Unfortunately we don't know anyone to get us in one of those but there must be a way somehow!
Thank you, we are very proud so just trying to find a way to encourage and support him when like you said, the system isn't really designed for it.
The wholesale companies will ask for a VAT number incase you are registered for VAT. But not all business are so they will accept orders without it; you just explain that you're not registered for VAT.
Registering as a sole trader is very simple, but it carries a lot of responsibility and he will need to keep his books in order and all the rest of it. Does he have liability insurance for selling sweets etc? There really is a lot to consider and you clearly don't know anything about it so get some research done before you go any further.
VAT is a separate thing, which you register with HMRC for.
Again, you really don't want to be going down that route - it's not compulsory unless turnover is over £85,000, and then you'd need to charge and account for Vat at 20% on any sales your son makes (but could recover Vat on any purchases). You would need to do quarterly Vat returns and pay the Vat over quarterly. Potential penalties etc (which would be chargeable on you, as his parent, I believe) for mistakes.
It sounds like you've found some scammy sites that are trying to charge you for registering a business. Unless you are registering with Co House for say a limited company, there's no charge.
In all honesty, you are potentially going to cause a lot of hassle for what amounts to not much reward, just to access wholesalers. Anyone you know with a bookers or Costco card? I'd look at that instead. The system isn't really designed for small-scale pocket money businesses, although I do admire your son's entrepreneurial spirit!
Ahh ok, i keep coming across things about paying a register fee in regard to starting a new business. I didn't realise he could just register with HMRC as self employed and not have to register as a type of business such as a company etc. I thought he had to do both, thank you that's really helpful!!
Whenever he tried to order anything through a supplier of wholesale goods, it asks for a VAT number? That's why I thought we had to register as well as declare it to get the number? Do you know if VAT is a separate thing or just comes under HMRC? The internet seems just full of jargon lol
Thank you for your Advice
That should read 'they should allow him not to complete a tax return' if there's no chance of him going over the personal allowance. They can insist on it though.
What do you mean by 'pay to register?'. There isn't a register of businesses as such, other than companies House which only applies to corporate entities.
As a sole trader, he would just register as self employed with HMRC. He would then need to complete a tax return annually reporting the profit from his business, although I suspect there would be no tax to pay. No charge to register as self-employed. Having said that, if you can convince hmrc that there will be no tax to pay, they should allow you not to complete a tax return...
You really don't want to be setting up a limited company for this. It would have to be in your name as a director and the shares would presumably be held in a bare trust for your son. There is quite a big administrative burden - formal accounts prepared in set formats, lots of specific rules etc, corporation tax returns and then potentially an income tax return for you. If you don't know what you're doing, you'd need to appoint an accountant - it's not something to rely on advice from the Internet on as mistakes can be costly. I suspect the accountancy fees alone would probably be more than the wholesale discount.
What do the wholesalers need in order to deal with him (or you).
Hi looking for some advice please!
My DS is 10 and wants to set up a business. He's gone for a sweet shop idea with some other bits and has been selling these little bits (alongside old toys etc) at car boots and to his friends/family etc. He has come up with a name and has been funding it with his pocket money and money made. We are more than happy to encourage this venture and support him but now he wants to get serious! He has now asked if he can register as a business so that he can order proper wholesale stock from suppliers (must have a business name etc to order). I've been looking into it all and he's saved up the money to pay to register but I'm stuck! What sort of business do I register this as? Sole trader seems to be best but I'm not 100% sure. I'm also unsure of how much needs to be in my name/his name as it's ultimately his business and I'll just be doing the paper work etc. Ive reached out to some advice teams but just wondered if anyone one on here knows and could shed some light? Any tips/Advice welcome on the whole situation.
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