View Full Version : Tax at the age of 16 and LLaw

22-04-2004, 06:24 PM

I am 16 years of age and running a WebHosting company. I am currently getting nearer to my GCSE's, and therfore I have not been running me business as much as I usually am.

I did fall into someone who had copied a slogan, the bloke said "oh, hang on" and added me with this person, even tho I did not complain about the slogan at that point. They ended up saying you cant say much and the most you can say is f*** you. They then started digging in on how my website is not professional, and I got realy angry and said " I cant be f** to argue with you anymore" and simply left the msn chat.

They are now claiming that I am not declaring Tax's for my business, im in breach of some rules, and that my sales are illegal and say they are reporting my company. Now I started running when I was 15 and all went well, I currently do not have an NI number, and I have not been contacted about anything about tax, as people told me I do not have to worry about it because I am in full time education (And I turned 16 in December).

They then shown me a list of registered companies saying I am not listed. I thought that you could have the choice to register a company or not (However I was planning to meet up with the bank manager regarding this after my GCSE's anyway.).

I realy need your advice, I want to remain anonymous, however if there is any advice I can get, please help me. I am only 16 in the business world, and I have been successful for over a year untill I got this.

I have no idea if this person was bluffing or not, but he claims he sent some forms off today.

Thanks again


22-04-2004, 06:43 PM
If he showed you a list of companies, they're probably the ones registered as Limited company at Companies House (http://www.companieshouse.co.uk). There is nothing illegal about not registering here. In fact, most small companies don't as it can complicate a lot of things (I won't go into it here, but if you run a search you will find pages of information on it).

The one main advantage of becoming a limited company (you have the letters "Ltd" after your company name) is that you get limited liability, ie, you, as a person are separate from the legal identity of the business.

You are currently operating the business as a "sole-trader", most small businesses on your high street probably operate as this. There is no formal registration and this almost definitely the best option for you at this point. Technically, your business is "you", trading under the business name.

However, tax and VAT are two separate things. I'm not sure what the tax complications are, but I know unless you are turning over £50k+ (the figure is around that, I forget exactly what it is - you can get the exact figure from the Inland Revenue site) you are not legally required to register for VAT (that means you would have to add 17.5% VAT on everything you sell). There are people that know a lot more about tax on here than I do so they will be able to explain it much better than I could.

James Smith
22-04-2004, 07:35 PM
Company reg - unless you are claiming to be a ltd company this is not an issue. If you are representing yourself as a limited company then you have a problem.

Tax - as a minor your parents are liable to pay your taxes, however so long as you don’t make profits in excess of £4615 a year there will be no tax due, and nothing needs to be done about this as a minor.

If you are earning more than this, then you may have a tax liability, and should sort it out. Making a voluntary declaration is the best approach. First up speak to your parents about this, as they are the ones who are responsible for your actions until you are 18.

Unless you are making more than £400 a month and calling yourself a limited company this chap is talking a load of rubbish and you should ignore him. Even if you are doing this, it is still unlikely that you are “being reported” as tip offs don’t normally involved form filling, but you should sort it out your affairs.

It is worth noting that the tax office not contacting your is no defence against not paying your taxes – it is up to you (or your parents as a minor) to understand the rules regarding running a company.

22-04-2004, 08:55 PM
Ok thanks for that everyone.

However he is now saying...

I will report you to the data advisory board,for breaching sections of the dpa.

He will not tell me what sections, and tbh, I should of researched this. I only looked into Data protection act and others which a WebHost should take into account when starting up.

When I asked what Sections he wierdly turned around and said

tell him to shut up and grow up (Im talking via someone).

Anyone wish to tell me what the DPA is please,

Thanks again :)

23-04-2004, 09:51 AM
DPA is the Data Protection Act - a lot of rules stating what information you can hold and for what purposes you use the information.

Whilst the DPA is fairly rigorously enforced I would be surprised if you are flouting much of it. Sound sto me llike this person is relying on you not knowing anything so mouthing off about technical elements of running a business. However, it is always better to be safe than sorry and to be clued up on what you need to know.

Approaching the Information Commissioner (basically monitors compliance with and offers advice on the DPA) yourself and explaining the details of what you do and what information you hold on people/businesses is wise.

Such institutions are always willing to help someone who approaches them in good faith and aren't the bad ogres they're sometimes made out to be. (I mean, even the Inland Revenue are helpful!!)

Check out www.informationcommissioner.gov.uk for further information. Click on the small business section.

23-04-2004, 10:20 AM
MrKule, listen......

ABOUT HIM*...... no reason what so ever.

do not carrying on anymore conversations with this person.

In addition,

END OF JUNE/JULY are your GCSE exams.

You are not going to jail. You will not be getting fined.
You may be liable for some arrears (tax,etc) but this is not the
same as a fine, as you would be voluntarily offering to cough
what you owe (if indeed you do owe anything). You may also
have to end up paying some fees e.g. company registration, VAT
registration, DPA registraion or insurance, etc, DEPENDING ON WHAT YOU ARE UPTO and how much your making from it.

As a hosting company you do have responsibilies to your customers (especially regarding the data you keep about them
and what you do with it... e.g. you CANNOT SALE peoples
private and personal information and/or show it to other people
they have not given you permission to show it to).

But trust me, your not in trouble, as far as the system is concerned your a minor, and all you must do is talk to your parents. If you do not receive adequate guidance there, then
simply when you get the chance, go and talk to a bank manager
at either Barclays or HSBC. Either now, or indeed, after your

Who ever is making these threats to you just has extra time on
his or her hands, is probably jealous, and most definately has
nothing real going for them.

Dont worry about them. Ignore them.

What ever issues you may have, can be looked at and addressed.

Your business wont be in trouble or affected. The worst that
can happen is a request for so and so pounds for things that
will be explained to you.

If you are using the words LIMITED or the acronym LTD in your
business marketing, GET RID OF THOSE LETTERS NOW! or on the
other hand you can register your business with Companies House, which may not be the best way for you and your
business to go now, given most importantly your age (directors
must 18+). So if your pretending limited, drop that and that
expect is cool.

On the money side. Keep records. If you haven't done this,
try and sit down and write down what you've bought, sold
and made (profit) including when and to whom and from whom.

when the time is write this info. will come in handy in helping you
set things straight...

If your selling peoples personal information (names, numbers,
addresses, what computer they have, what information u host
for them) quit that now...... and say no more about it....

and u if u plan to transfer peoples information to other people
let people know on ur site, over email, or by letter and make
sure they actually agree to what u plan to do.....

In a nutshell, this idiot on your back did u a favour, cos he/she
got u thinking about things.....

But now the favour is done forget the ******.....

WELL DONE on even daring to get into business at such an
early age...definately the world could do with more people like

keep up the good work, and relax. speak with your parents
(if u can print this whole thread including my comments and
the other peoples, OR just save it on your machine) and show
them this thread and explain whats goin on. DONT TELL THEM
ANY LIES. If you feel your parents aren't getting it, or cant help
again, take this thread and yourself to a bank manager at
barclays or HSBC.

take care....

23-04-2004, 10:39 AM
Originally posted by software-europe
WELL DONE on even daring to get into business at such an
early age...definately the world could do with more people like

Exactly right. And if you have made any mistakes then the fact that you were 15 when you started is a good excuse. To be running a business pre GCSE's that makes money is a pretty good start.

The Inland Revenue dont harass people that make mistakes, they will let you pay what you owe, if anything. The Inland Revenue go after people who dont follow the rules from the start and make no effort to pay the arrears.

Just call them an explain your situation, if you have trouble paying the arrears then im sure they will work something out. But if you have trouble paying it, then be honest with them, make an arrangment to pay so much per month (that you can honestly afford) and stick to it. Also ask your parents to help you. Im sure they will support you.

23-04-2004, 10:44 AM
And to reiterate the point made by SE, concentrate on your GCSEs. Tell your parents then let them deal with it until you have finished your exams.

Your exams are the most important thing right now.

27-04-2004, 09:53 AM
Sorry guys, I've just added this entry to propergate this message back to the top one last time....... just so that MrKule sees it if he hasn't done so already........

Please excuse this liberty.


28-04-2004, 05:06 PM
Thankyou for all your comments,

I have not replied, becuase I have been doing quite a bit of revision and hae only been online to give support to users (Via email).

I would like to thank you all for your support, and I guess this was just a fellow kid trying to score points.

I have not said anywhere I am a Limited Company (LTD), and therefore that should not be any problem. I am just under £400 a month profit, so that should be no problem either.

We do not share with anyone our customers details, we do however store clients address's and contact details using WHM Auto Pilot. This should be no problem, right?

Great support, I will continue to use this website as often as possible.

Thanks everyone!

(Especially Software-Europe)

29-04-2004, 01:35 AM
Hey MrKule

Absolutely nothing is wrong with storing
clients names and addresses.

Most websites include somewhere on
their site... either under "terms and
conditions" or "privacy policy" saying
that we keep information about you
including blah blah blah and we promise
not to do this and that with it.

check these out:


and good luck with those exams MK...


30-04-2004, 09:33 PM
Obviously you've got something that this person wants or they would leave you alone (intellectual property perhaps - maybe the slogan etc...)

Concentrate on your exams and until these are over don't worry about this person........