As the summer holidays progress, many business-owning parents face the annual challenge of keeping their children occupied. One productive — and often overlooked — option is involving your child in your business in a legitimate, structured way.
Can My Child Legally Work in My Business?
Children aged 13 and over can legally undertake part-time work in the UK, subject to specific restrictions and any local authority bylaws. The work must be age-appropriate and must not interfere with their education or well-being. During school holidays, there are limits on the number of hours they can work, which vary by age and local regulations.
More information on employment rules for children can be found on the official government website or through your local council.
Paying Your Child — What You Need to Know
If your child performs genuine tasks for the business — such as filing, packaging, assisting with admin, or creating content — you are permitted to pay them a reasonable wage, as you would any other employee.
However, HMRC applies strict scrutiny to arrangements involving family members. To ensure compliance:
- The work must be real and necessary for the business.
- The pay must be commercial and appropriate for their age and the role.
- Payments must be made through payroll, with full records kept.
You should document the hours worked, the nature of the work, and retain timesheets or evidence of output. This documentation will be crucial in the event of an HMRC enquiry.
Tax Efficiency of Employing Your Children
Provided the salary meets the wholly and exclusively test — i.e., it is incurred entirely for the purposes of the business — it will be deductible for corporation tax purposes (or income tax, if you’re a sole trader or partnership).
Importantly, your child is entitled to the same personal allowance as any UK taxpayer — £12,570 for the 2025/26 tax year. As long as their total income remains below this threshold, they will not be subject to income tax.
This presents a mutually beneficial opportunity:
Your business gains a tax-deductible expense
Your child gains valuable work experience and earnings
- And you may gain a little peace and quiet from screens and devices.
Professional Guidance Is Essential
While this can be a tax-efficient and practical arrangement, it must be implemented carefully.
If you are considering employing your child and would like support with documentation, payroll setup, or determining suitable tasks and pay, please don’t hesitate to get in touch with Johnston Wood Roach Chartered Accountants and Chartered Tax Advisors on 02392 269977 or email enquiries@jwraccountants.co.uk
