Tax for a performing child

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Thisisallnew
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Tax for a performing child

Post by Thisisallnew » Thu Nov 17, 2016 11:50 am

Hi All,
As per my name this is all very new to me and I am wondering if others more experienced could point me to some expert advice.
Our child has managed to get a role which means he will be paid over the tax free threshold and will thus need to pay tax.

For others in this position can I ask if the agent has managed the PAYE/NI for them or have they simply forwarded the childs cut to you and then you have engaged a third party tax company? I appreciate we could just work out and pay the tax ourselves and may go down that route but wondered what others have done in this situation.
We also want to ensure some money is left for when they are an adult and whilst investment advice is separate, it could be related when it comes to tax.

Thus any words of wisdom?

Regards.

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missmoneypenny
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Re: Tax for a performing child

Post by missmoneypenny » Thu Nov 17, 2016 1:29 pm

Hello,

It is a nice position to be in :) We get paid by the agent and then arrange the accounting ourselves. Hope that helps and good luck x

Thisisallnew
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Re: Tax for a performing child

Post by Thisisallnew » Sat Nov 19, 2016 6:04 pm

Thanks. I suspected this might be the case but a nice problem to have!

Panda
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Re: Tax for a performing child

Post by Panda » Wed Dec 14, 2016 1:30 pm

Well done to your DS. It is usually stated on Agency contracts that you are responsible for all tax/NI payments etc etc as you are hired on a self employed basis.

Don't forget there's a lot of things you can use to offset tax, claim against travel fares, office expense, phone and worth speaking to your agent if payment is due around the tax year finish/start to see if you can roll anything over or need to get a payment in one tax year to have another in the second tax year.

paulears
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Re: Tax for a performing child

Post by paulears » Thu Dec 15, 2016 7:01 pm

There are two things here- PAYE and NI will indicate the status is that of an employee, which means simpler accounting - essential you fill in the form as adults do. Self-employed status would mean the full fee, and then the agent's commision is an expense, reducing your tax liability. It might get tricky if properly self-employed status is the chosen one because the revenue might want payment on account.

Panda
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Re: Tax for a performing child

Post by Panda » Thu Dec 15, 2016 7:07 pm

As far as I am aware once HMRC have got their claws into your child you'll have to fill out a Self Assessment Tax Return by end of Jan every year, even if you are under the £10600 / £11000 :-(

martint
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Re: Tax for a performing child

Post by martint » Fri Dec 16, 2016 10:45 pm

Panda wrote:As far as I am aware once HMRC have got their claws into your child you'll have to fill out a Self Assessment Tax Return by end of Jan every year, even if you are under the £10600 / £11000 :-(

Don't forget to offset expenses.

paulears
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Re: Tax for a performing child

Post by paulears » Mon Dec 19, 2016 3:01 pm

Many accountants, like solicitors, offer a free chat. The rules on performers are often a bit 'new' to an accountant only used to builders and electricians, but they all have access to proper on-line guidance - and can be very useful for maximising your income. Phone calls, photography, some of the travel and subsistence, audition expenses, clothes (if specific for a job - like the odd leotards and special shoes) small amounts for using an office at home. Some of these will be allowed and others not by your accountant - essentially if they are critical for the business of performing and 'reasonable' then they can be set against your income. Electricians claim for their tools of the trade - actors and performers can do similar with their expensive outgoings with proper advice. Well worth doing if you go over your tax allowance threshold.

Panda
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Re: Tax for a performing child

Post by Panda » Mon Jan 16, 2017 4:08 pm

Hi - this came up on my Facebook feed and I thought it might be of use - http://www.actorhub.co.uk/365/tax-deduc ... g-expenses

francescasmum
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Re: Tax for a performing child

Post by francescasmum » Tue Jan 17, 2017 3:44 pm

that's very interesting, thank you for posting Panda =D>

swanny
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Re: Tax for a performing child

Post by swanny » Sun Jan 22, 2017 2:36 pm

If your child earns under the threshold do you bother with telling HMRC and putting in a self assessment?
I'm swanning around trying to get the hang of all this! Thanks for your help!

martint
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Re: Tax for a performing child

Post by martint » Sun Jan 22, 2017 8:53 pm

swanny wrote:If your child earns under the threshold do you bother with telling HMRC and putting in a self assessment?
if it's going to be a regular thing then yes I would.

The link above mentions claiming for suits, you can only claim tax relief on clothes you couldn't wear outside the workplace.

Thisisallnew
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Re: Tax for a performing child

Post by Thisisallnew » Thu Mar 02, 2017 2:26 pm

Thanks all for the comments.
For the reference of others here are my findings.
You need to register for self assessment if you earn over £2500 untaxed in a financial year. (but then in other places is says £10k on investment income so a bit unclear)
Personally I would not register a child for self assessment unless you are absolutely required to as it is a pain in the backside.

As we are over this amount we do need to register our son as 'Self employed'
If your child is under 16 they do not pay any National insurance and they do not get an NI number.
But you are supposed to register with HMRC within 3 months of starting work to inform them you will be needing to submit a self assessment. However to do this online you need to give them your childs NI number.
And as you dont have one you will need to fill in an SA1 form signed by your child and post it (not email!) to say your child has no NI as they are too young.

The bit that is not relevant to us at this point (but one day hope it is!) is the question of us adding VAT onto the amounts he is being paid.
Acting is considered a service and therefore 20% VAT should be attributed however this is only required if the actor is earning over £83k in the year.
In this case you would actually have to send an invoice to the agency each time adding 20% VAT. They should be fine with this as they would simply claim this back.
The other side to this is if your agency as a business takes more than £83k they will need to add VAT to their cut that you will need to pay. But if you are registered you would claim this back. I suspect this could get a bit complicated but will cross that bridge when we get to it.

As I am dealing with HMRC I suspect there will be a few more hoops to jump through and will let you know as I encounter. :D
Hope this helps any of you who are fortunate enough to have this problem.

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