14 year old earnings & tax
Discussion
We all have a Personal Allowance from birth. Probably very few benefit until older.
If not a direct employee, but self employed, then I suppose refer to the HMRC website re. the procedure for reporting.
Don't try phoning the HMRC, that might result in mental injury, or worse.
I presume there will be NI involvement, but I don't know much about that.
Collectingbrass said:
Might be worth talking to the school, you or your son may need to declare the job. I caused some difficulty by declaring a job 3 weeks or so before my 16th (when you no longer had to) but that was when a shift in a kitchen earnt me £10...
This is 1000% one of those times where you don't be a nice little rule follower and do rediculous stuff like the above 
I'm an Irish accountant
The simple answer is that once a person starts earning income over the NI threshold (if over 16) they must pay NI and, if over the tax threshold, Income Tax as well (from any age).
If the income is from running a sole trader business (such as self employment), then the individual taxpayer pays the tax and NI through the Self Assessment system (for the moment).
Don't forget that people running a business are allowed offset legitimate business expenses and Capital Allowances against their Gross Takings so what he is receiving from his customers/clients is not the amount on which he would be liable to tax or NI.
The simple answer is that once a person starts earning income over the NI threshold (if over 16) they must pay NI and, if over the tax threshold, Income Tax as well (from any age).
If the income is from running a sole trader business (such as self employment), then the individual taxpayer pays the tax and NI through the Self Assessment system (for the moment).
Don't forget that people running a business are allowed offset legitimate business expenses and Capital Allowances against their Gross Takings so what he is receiving from his customers/clients is not the amount on which he would be liable to tax or NI.
MYOB said:
Eric Mc said:
I'm an Irish accountant
The simple answer is that once a person starts earning income over the NI threshold (if over 16) they must pay NI and, if over the tax threshold, Income Tax as well (from any age).
If the income is from running a sole trader business (such as self employment), then the individual taxpayer pays the tax and NI through the Self Assessment system (for the moment).
Don't forget that people running a business are allowed offset legitimate business expenses and Capital Allowances against their Gross Takings so what he is receiving from his customers/clients is not the amount on which he would be liable to tax or NI.
My favourite type of accountant!The simple answer is that once a person starts earning income over the NI threshold (if over 16) they must pay NI and, if over the tax threshold, Income Tax as well (from any age).
If the income is from running a sole trader business (such as self employment), then the individual taxpayer pays the tax and NI through the Self Assessment system (for the moment).
Don't forget that people running a business are allowed offset legitimate business expenses and Capital Allowances against their Gross Takings so what he is receiving from his customers/clients is not the amount on which he would be liable to tax or NI.
So it sounds like he just needs to do an annual self-assessment? I’m fully aware of offsetting expenses etc which may not be necessary unless he upgrades his IT equipment. Oh, obviously accountancy fees will be a legitimate business expense.
And at his age, it’s only going to be tax rather than NI too?
I'm not sure if he can pay into a SIPP at his age but that's one route to get his tax bill down to zero - unless Labour change the rules.
It sounds like your son is currently doing something he loves and being appropriately rewarded for it. He's now got the opportunity to spend an equal number of hours each month trying to keep hold of his salary through "tax efficiency" and then discovering that he can't access a penny until another 3 lifetimes have passed. By the time he's reached 16, he should have the same jaded listlessness towards work that many of us didn't discover until our 40s 
CheesecakeRunner said:
Yeah, there are legal restrictions on the amount of hours a 13 to 16 year old can work, but it sounds like your lad will be fine on that front doing an hour or so a week.
https://www.gov.uk/child-employment/restrictions-o...
Kid doesn’t have to pay any tax unless they go over their £12750 personal allowance. As best I can tell, they don’t need to declare it, but I reckon it’d be worth keeping track of it all just in case. Especially if they earn savings interest.
https://www.gov.uk/child-employment/paying
£2000 a month 12 months in a year £12,750 allowance… https://www.gov.uk/child-employment/restrictions-o...
Kid doesn’t have to pay any tax unless they go over their £12750 personal allowance. As best I can tell, they don’t need to declare it, but I reckon it’d be worth keeping track of it all just in case. Especially if they earn savings interest.
https://www.gov.uk/child-employment/paying
MYOB said:
I’ve suggested he puts a proportion of his money into a junior ISA but we’ll see.
Don’t know if it’s different with jisa, but the interest rates are generally lower on isa’s compared to other savings accounts and he’s not going to hit any limit where tax on interest would be payable?LR90 said:
MYOB said:
I’ve suggested he puts a proportion of his money into a junior ISA but we’ll see.
Maybe this is playing the long-game a little too much, but starting a pension could be something to consider.Edited by LR90 on Wednesday 28th August 21:39
MYOB said:
He simply started creating contents on his own accounts on tik tok and various other social media pages. He started doing gaming clips then progressed into other subjects. He was contacted by a few people across the world who had seen his work and said how good they were and they started to pay him to do some ad hoc video creations for them. We're talking of 30 second clips, perhaps a little longer and then the work started increasing to the point where one of these contractors have started a new business in the AI field with a few others guys and recommended my son to do regular work for them.
I found out today that as well as £2,000 per month, he can also reach a certain target and get a £1,000 bonus per clip that reaches a specific target.
For obvious reasons, I don't wish to divulge who they are. We both accept that it's a hign risk, high rewards scenario but at 14 years old he will have nothing to lose and whatever happens, he will have an opportunity to earn some money, get some useful experience to add to his CV and perhaps get a foot into the industry where the sky is the limit in the AI field.
PS - he subscribes to Adobe and uses their video editing tool. He started doing this at 11 years old off his own bat and taught himself to use this. He also creates effects and sells these on to other creators. Remarkable.
Oh wow that's fantastic! what better than doing something you love and getting recognised for that, and work from it. He must be very talented and I'm sure you're very proud of him. No doubt he has a bright future ahead. Great stuff.I found out today that as well as £2,000 per month, he can also reach a certain target and get a £1,000 bonus per clip that reaches a specific target.
For obvious reasons, I don't wish to divulge who they are. We both accept that it's a hign risk, high rewards scenario but at 14 years old he will have nothing to lose and whatever happens, he will have an opportunity to earn some money, get some useful experience to add to his CV and perhaps get a foot into the industry where the sky is the limit in the AI field.
PS - he subscribes to Adobe and uses their video editing tool. He started doing this at 11 years old off his own bat and taught himself to use this. He also creates effects and sells these on to other creators. Remarkable.
Edited by MYOB on Wednesday 28th August 23:25
MYOB said:
Thanks. He has done very well. These people used to pay him £250 per edit he made-which took him no longer than an hour.
So at £500 a week, he’s losing out!
But we are both looking at the bigger picture!
Well done to him! I know a few full time video editors in my industry and they’re not hitting even £100 hour (ex Vat).So at £500 a week, he’s losing out!
But we are both looking at the bigger picture!
He’s obviously got something (creativity) that shines through, and his value-add is more desirable than just his time.
Gassing Station | Finance | Top of Page | What's New | My Stuff