Childrens "earnings" on tax credit forms

keigcf

Hi,
My son has turned 16, left school and started college. He has earn't by odd jobing £500 through the summer holidays and Saturdays, now Ok I understand I register him self employed to declare this, no problem. I however have him on our tax credit form as a dependant, do I have to notify them?:o

HappyMJ

keigcf wrote: »

Hi,
My son has turned 16, left school and started college. He has earn't by odd jobing £500 through the summer holidays and Saturdays, now Ok I understand I register him self employed to declare this, no problem. I however have him on our tax credit form as a dependant, do I have to notify them?:o

You don't register him as self employed....neither does he if he is only £500 in the tax year. It's not worth the hassle. He would if he did register have to fill out exemption forms so he didn't pay national insurance. There is no gain or loss to the HMRC either way.

keigcf

I phoned HMRC, I know there is no gain/loss to them, I just want it right. I was hoping they would tell me as he was a student there was an exemption say upto £xxxx but they didn't they told me he had to register. My concern is where I therefore stand with tax credits?

dori2o

Is the odd jobbing a permanent thing he is looking to do, I mean is it regular, does he do some 'work' every week?

If so and it is more than a 'hobby' then IMO he would have to register for SA, but as long as his income was below the NIC threshold he could claim an exemption from paying NIC's under the small earnings exemption. There is a decleration you can complete in the pack you receive after registering.

If it is just a hobby then you don't need to bother.

Secondly with tax credits, it's a bit difficult.

He's still in FTNAE (full time non advanced education) but he could also be working (depending on what you decide above) and the regulation stats that once a young person starts working, they are no longer classed as a child for tax credit purposes.

However, I can't see anything that refers to working whilst also in FTNAE.

You say he has made £500. Is this his proft or turnover? Does he have any expenses (tools, travel, etc etc)?

If you can answer these questions we may be able to offer further advice.

keigcf

He had no expenses, we ran him there and back, or they did, no tools. He possibly could get another £200 before April so say £750 max in the year. He isn't working, he just went and helped out a neighbouring farmer, he wasn't really expecting to earn that much. He is in full time education so not "working" as such. It is not regular, it was in the holidays when he had some extra time and they needed some help.

miduck

keigcf, can I say how impressed I am that you are doing this "by the book", and in the process teaching your son about the tax system? All too often we see people in their twenties (and beyond!) that have no idea how to handle their finances, and in most cases the reason is they have never been shown what to do. Good on you for doing this now, your son will reap the benefits when he is older

keigcf

We try and teach values, and do things by the book, I will however feel frustrated if this makes him a non dependant!

dori2o

keigcf wrote: »

He had no expenses, we ran him there and back, or they did, no tools. He possibly could get another £200 before April so say £750 max in the year. He isn't working, he just went and helped out a neighbouring farmer, he wasn't really expecting to earn that much. He is in full time education so not "working" as such. It is not regular, it was in the holidays when he had some extra time and they needed some help.

If that is the case then I would say it's nothing more than a hobby and IMO neither the Tax Office, NI office or Tax Credits Office need to be informed.

Dunroamin

dori2o wrote: »

He's still in FTNAE (full time non advanced education) but he could also be working (depending on what you decide above) and the regulation stats that once a young person starts working, they are no longer classed as a child for tax credit purposes.

I'm afraid that is totally incorrect. As long as the child is in FTNAE(and under the age of 20) then the parents are able to claim CB/CTC for him, regardless of whether he has any earnings or not.

Sixer

Dunroamin wrote: »

I'm afraid that is totally incorrect. As long as the child is in FTNAE(and under the age of 20) then the parents are able to claim CB/CTC for him, regardless of whether he has any earnings or not.

Just to second this post and add another voice. OP - your son is still your dependant.

keigcf

Thank you Dunroamin and sixer, he is my dependant in my eyes, do I have to notify IR and tax credits?