tax on childs earnings

tusharag

Hello,
My 2 year old son has been offered a small modelling assignment.
Potentially he may get paid around 2K pounds.
Can he have his own tax-free allowance - or will his income be part of my income and hence taxed ?
Thanks.

McKneff

He would have his own if it was in the bank in his name.
Just in case he is going to earn more than his allowance I believe you would have to fill in an R85 form, but ask at the bank.

zagfles

McKneff wrote: »

He would have his own if it was in the bank in his name.
Just in case he is going to earn more than his allowance I believe you would have to fill in an R85 form, but ask at the bank.

The R85 form is if he's earning less than the allowance (about £8k), not more.

OP - just a quick warning, may not apply to you, but there's a common scam where you (or your child) are told you'd get a modelling contract and they try to get you to pay a large amount up front for a professional portfolio of pictures with a "guarantee" of work. Under no circumstances pay anything up front, no reputable agency will charge you directly, they'd get commission from the assignments.

tusharag

zagfles wrote: »

The R85 form is if he's earning less than the allowance (about £8k), not more.

OP - just a quick warning, may not apply to you, but there's a common scam where you (or your child) are told you'd get a modelling contract and they try to get you to pay a large amount up front for a professional portfolio of pictures with a "guarantee" of work. Under no circumstances pay anything up front, no reputable agency will charge you directly, they'd get commission from the assignments.

Thanks for the info - much appreciated.
I am told by an accountant [FONT=&quot]that children may receive a personal allowance. The general rule states that if the parent benefits from the income and the income is received from the parent, the income remains taxable on the parent, apart from the first £100 each tax year.

This income is from a known contact who wants to build a website and use my sons pictures on it.
So i wonder if the taxman would come around and tax it as my income.
Can i use the money for my child ? or it has to be kept as his savings ?


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xylophone

If your child has earned the income then it is his absolutely - keep it separate from any money that you as a parent give him unless it is to go into a tax privileged account like the CTF/JISA for example.
Keep records of where money in the account originated.



An R85 can be completed if the interest on the money is less than the child's tax allowance - if not you cannot complete it but if the 10% band applies then you will need to claim overpaid tax for him on an R40.
http://www.hmrc.gov.uk/helpsheets/r85-helpsheet.pdf
http://www.hmrc.gov.uk/taxon/bank.htm
http://bank.virginmoney.com/savings/learn/childrens-accounts/
http://taxaid.org.uk/info/inheritance-tax/income-tax-and-gifts-from-parents - unfortunately, the HMRC guidance sheet referred to here seems to have vanished - if unsure you will need to ring HMRC.