Considering working for my parents in the family business but not sure on wages etc...?

[PurpleLostPrincess]

My parents run their own business, I occasionaly do a bit of typing etc. for them.

I had DD2 in 2007 but she was born with multiple problems and I am now her official carer, never went back to my old job from maternity leave etc. DH is on longterm sick due to permanent health issues so he gets DLA, DD2 gets DLA, I get CA and we get HB and tax credits etc. My mum has mentioned passing the business to me eventually and recently I have been considering doing this but it would involve me 'working' at their house a couple of days a week to get into things and gain a knowledge of how things work. My dad has run things for many years but is getting old and forgetful which is putting extra strain on my mum so I'm keen to help. They are upgrading cars (do lots of business mileage), so have suggested that I have the old car instead of them selling it, and my work would be in payment for it (our car is falling apart so we really need it, it's worth about 7k). They are very supportive both financially and emotionally, we are quite a close family. Equally we are very much the 'above board' type of people and wouldn't want to do anything that bends the rules at all.

So, my question is, would it be legal for me to 'work' for them in payment for the car? Do I need to notify the benefits even though I'm not actually going to get a tangible, regular income from it? (not that a car isn't tangible, but it won't show on bank statements if you see what I mean!). If we're stuck sometimes they help with food shopping, but we do our best to pay them back. They also buy things for the kids that we can't afford...

Dazed and confused... would appreciate any opinions please, thank you in advance

Hi PurpleLostPrincess

You will need to declare the income from your parents, even if you aren't actually receiving it, because it is classed as 'payment in kind'. In effect, they are paying you, and then taking the money straight away for the car.

"
Work and earnings

You cannot get Carer's Allowance if you earn more than £100 a week after money has been taken off to allow for your expenses.

Expenses that are allowed are for things like:

• some National Insurance (NI) contributions
• Income Tax
• half of any money you pay towards personal or occupational pension schemes
• other expenses you have to pay because they are a necessary part of your job

After allowing for these things, you are allowed up to half the rest of the money you earn to help meet the cost of paying someone else (but not a close relative) to look after a child or children, or the person you look after, while you are at work. "

So, if you were to earn £6.25 per hour net, then your wage for 2 days' work (16 hours) is £100.

However, if you pay for your DD to go to preschool, or nursery, you can offset up to half of your earnings for her care. So, you could have net earnings of £200, as long as you spent £100 of it on childcare. So gross pay of £236.22 per week or £14.76 per hour if you worked a 16 hour, 2 day week.

Thanks Lou, I suspected that was the case but thought I'd run it by somebody. So, we'll need to work out an amount in order for me to declare it I guess. I've worked out that if I'm working, we'll lose around £700 per month what with CA, HB and CTB, so I'll need to earn more than than in order for it to be worth it. Tax credits will change in that the child tax credits will go down but if I do over 16 hours per week, I think we will qualify for Working Tax Credits.

Yes, DD2 will be going to a CM from September, probably 2 days a week, regardless of whether I decide to work or not, because she needs to be in a more social environment etc. We are yet to see what extra needs she will have in terms of support but she should be fine to be in mainstream care and later school, I hope (her problems are with her bowels and there's a chance she'll be in nappies for the rest of her life). Of course I will declare this to tax credits when the time comes and remember from when I was working when DS and DD1 were little that they contribute towards it in some way.

I'm now beginning to doubt if it will be viable at all, it may be better if I work for them full time while DH takes care of DD2 to start with (still CM from sept). Then at least I can try to pay off the car but also have some sort of income to compensate for the loss in benefits. This is totally awful isn't it - I've worked all my life up until having DD2 and never thought I'd be in a position where it's 'not worth' me working - bonkers!!!!!

If you work 16 hours, then Tax Credits should pay towards your child care, plus you keep your Carers' Allowance, as long as your income is less than £100 after tax and childcare costs.

If you go to www.entitledto.co.uk you will be able to put in the different scenarios and see exactly how much you are affected.