A Web Hosting Company

[MaT22]

Hi, I'm 16 and a few months back I have purchased a reseller from Galaxy-Hosts.com which I am very happy of. At first it was mainly going to be used for my personal web hosting and to host a few friends etc... But I ended up getting a few customers so I have decided to start my own company iHostPlus.net which will soon be up and ready, I have purchased a ClientExec license for my billing script and a few other things, I think I am ready to go.
I am working on this with a friend which live in the USA and I'm based in the UK. The address and company number will be in USA, I may add a UK phone number for the UK customers. But my problem comes in with the legal issues. What about TAX? Do I have to pay the TAX in the UK or USA? Or do I even have to pay TAX at all? I am 16 so I'm eligible to pay TAX in the UK and the government here makes you pay TAX for everything you do. lol. But anyway yeah, maybe there are any other legal issues I should know of? Thanks.
PS. The company must me reliable otherwise my sites wouldn't be reliable. :)

[Decker]

For the tax issue, what will your role be?

[Richard]

Rosmatis - You wont be able to register the company until 18 in the UK, therefore, it will be illegal no matter, and as you are not registered, you cannot declare tax ;)

If its being registered in the US (As an LLC, etc) then you need to pay US tax.

99% of hosts on this forum are not registered or paying tax of any form.

[Decker]

Rosmatis - You wont be able to register the company until 18 in the UK, therefore, it will be illegal no matter, and as you are not registered, you cannot declare tax ;)

You don't need to register a company name to be liable for tax in the UK, you just need to accept money for goods or services (work in otherwords),did you know the tax office will issue a tax code to those under 16 too with a tax free allowance if they have an income, and at 16 you are liable for ANY self-employed role.


99% of hosts on this forum are not registered or paying tax of any form.

Site your proof of this please :wink2:

[AMC]

Is there a minimum age under which an individual is barred from acting as a company director?
The Companies Act imposes no restriction on the minimum age of company directors. However Companies House will actively discourage the appointment of anyone under the age of 16 from taking up a company directorship on the grounds that the individuals concerned may not fully understand the legal liabilities that go with the position and for the most part will not have the experience necessary to perform the duties of a company director. There will be exceptions to this general rule and we are open to persuasion.

Straight from Companies House UK Richard ;)

[~ServerPoint~]

rosmatis, why don't you want to sytay on reseller account while you get older?

[MaT22]

rosmatis, why don't you want to sytay on reseller account while you get older?

Well I do want to stay with a reseller but If I would need more space then I would move on.


For the tax issue, what will your role be?

I would be the owner and my friend would be the co-owner.
Apart from this, If the people who make you pay TAX would find out that I have income and don't pay tax, what would they do?



99% of hosts on this forum are not registered or paying tax of any form.

I actually do believe this is true.

[Decker]

1. A reseller package for a host is no longer an option due to another level of support required (unless it's wide open and the server operator is very stupid), minimum VPS if selling on.

2. If you are to be partners (owner and co owner) you would have to pay tax at the rate suitable to you in the country you reside in.

So if your in the UK as one partner then a basic rate after you have submitted your accounts at the end of the tax year you start trading (you can fluff that a bit, fore a month or so till you get going for your start date, but don't take the P out of them as they come down hard when your suspected of that - and online business is actually easier to track than others).

Again this is only paid on what you clear as your earnings after outgoing expenses. So all your costs are taken into account (split between partners, get a contract for that as in percentage share).

You can actually in the first year or two end up with the tax man owing you money for the following year. Maybe get him to pay out before then as a rebate - so you could get money back without paying depending on income and expenditure.

It's a great thing but try to keep it for the next bill as you don't normally get it for more than the first year :wink2:

3. Still waiting for Richard to qualify this :P Possibly qualifying the 1% that does too!

[MaT22]

Thanks for the help Decker.
So If I earned $20 profit a month as a starter and paid tax in the USA, how much would it cost me? Also how would I get to contact the tax people in USA? Any websites? Cheers.

[Decker]

You said your in the UK, so you don't pay US tax (and can't without a US presence - your partner will however).

Don't get over complicated you won't be that involved for some time yet.

If you earn $20 as a partnership, then you could be joint liable ($10 each with exchange rates current at time of returning per date received) in other words both do your own - your not a multinational yet.

For $20 about £10 is it worth worrying, no not until you add all the other $20.

You could have looked this up and sorted yourself out but chose not to as this was easier didn't you.

Your ready for business in only one way - using others.

You've had your last tip from me as the last question was so inane it was painful.

[MaT22]

You said your in the UK, so you don't pay US tax (and can't without a US presence - your partner will however).

Don't get over complicated you won't be that involved for some time yet.

If you earn $20 as a partnership, then you could be joint liable ($10 each with exchange rates current at time of returning per date received) in other words both do your own - your not a multinational yet.

For $20 about £10 is it worth worrying, no not until you add all the other $20.

You could have looked this up and sorted yourself out but chose not to as this was easier didn't you.

Your ready for business in only one way - using others.

You've had your last tip from me as the last question was so inane it was painful.

Thank you very much for all your tips and actually I came here to ask around because I really don't have any clue about tax and sometimes information found on other websites can be false. I have googled a bit but didn't seem to find anything useful.
I will try once more and return here with some results.

[.Andy]

You don't need to register a company name to be liable for tax in the UK, you just need to accept money for goods or services (work in otherwords),did you know the tax office will issue a tax code to those under 16 too with a tax free allowance if they have an income, and at 16 you are liable for ANY self-employed role.



Site your proof of this please :wink2:

Crissic Solutions
Galaxy Host (may be a diffrent form but I know there legaly registered)
And GeekRack
HostMaxPro *my work*

I am not aware of any others LLC

[AMC]

Come one Andy get your facts right ! :(

What about

hostingdepartment.net
Comfyhost
Steadcom

and thats just off the top of my head. ;)

[Decker]

All mine run legit under one holding ltd co. :wink2:

[impactgc]

Also we are an LLC based in the US.

So I guess I am part of that 1% :)

Adam

[cfhdev]

We also are a registered US Corporation.

[Decker]

Richard I think your busted on that one mate :D

99% of hosts on this forum are not registered or paying tax of any form.