How Much Can a Child Earn Before Paying Tax in the UK

July 12, 2022
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How Much Can a Child Earn Before Paying Tax in the UK

Want to know how much a child earns before paying tax in the UK? Read on and learn what age children start paying tax in the UK, when to register your child with HMRC for taxes, and much more.

What Is the Minimum Age Children Can Work?

According to the GOV.UK site, the youngest age a child can work part-time is 13 years. However, there is an exception for children working in television, modelling and theatre. While they can start working under 13 years, they’ll need a performance licence.

Children in the UK must reach the minimum school leaving age of 16 years to work full time. At age 16, young workers can work up to a maximum of 40 hours a week. At this age, employers need to pay them through PAYE. Once a young worker reaches 18, adult rules and employment rights apply.

At What Age Should Children Pay Tax in the UK?

In the UK, school going children are not entitled to the National Minimum Wage. Also, kids under 16 years old do not make National Insurance contributions. As such, parents should include them on their payroll as long as their income is over their personal allowance.

The standard personal allowance in the UK is £12,570. This is the amount of income that people in the UK do not have to pay tax on. However, if you claim a blind person’s allowance and marriage allowance, your personal allowance will be bigger.

Once your child reaches 16 or 17, they’re entitled to at least a minimum wage of £4.62 per hour. All registered employers must record and report this pay as part of their running payroll. If young workers between 16 and 17 earn more than £120, employers should make deductions.

When Should I Register My Child With HMRC for Taxes?

If your child receives pay of more than £1,000 during one tax year, register him with HMRC for taxes. However, if your child earns below £1,000 per year, you can take advantage of the trading income allowance. This is an income tax allowance available every tax year for earning a little cash on the side.

This allowance is perfect for UK individuals who have a side hustle or get their main income from:

Uber
Deliveroo
Gardening
Blogging
Amazon
eBay
Hobby and more

Remember, the income of £1,000 should not relate to profit.

How Do I Register My Child With HMRC for Taxes?

Registering your child with HMRC is easy, but before filling out the form, you need to have the following information:

Name
Date of birth
Phone number
Email address
UK address
National Insurance Number

Your child will receive the National Insurance Number once they reach 16 years. In fact, they should receive the number around the time of their birthday. Once they receive the number, they need to make national insurance contributions.

Now that you have the information above, head to the HMRC website. Choose the option to “Register Online.” Set up your child’s HMRC online account. This will enable you to help your child manage their taxes online.

Enrol your child for self-assessment online. Now, wait for HMRC to send your child’s UTR number by post. This usually takes up to 10 days. It would be best if you also waited for an activation code. Next, you’ll enter into your government gateway account and complete the setup of your child’s HMRC online account.

When Should I Register My Child With HMRC for Taxes?

The deadline to register your child with HMRC for taxes is the 5th of October. If self-employed, the deadline is in your child’s business’s second tax year. For example, if your child started working on the 3rd of January 2022, you’ll need to register him by the 5th of October 2022. Otherwise, there are penalties for not missing out.

Overview

Once you register with HMRC online, wait for your child’s UTR number and activation code. After you complete setting up his HMRC online account, follow the self-assessment rules. That includes working on your child’s taxes and filing a tax return by the 31st of January each year. If you’ve any questions about the application process or think you made a mistake, contact HMRC on 0300 200 3310.