Child Taxation: 3. Self Assessment Pay or Reclaim Tax
Published / Last Updated on 30/07/2021
We have already learned that children must pay income taxes and capital gains taxes in the same way and that children also have full personal income tax and capital gains tax allowances.
The same position applies for filing self assessment income and capital gains tax returns. If the above applies, you may need contact the Department for Work and Pensions (DWP) for a National Insurance Number although for under 16s this will not be issued and also with HMRC to register for self assessment for the child to get the child a UTR (Unique Tax Reference number) – this is required.
Paper Based Returns: If the child is able to sign the tax return they should do so but if they cannot or you prefer to take responsibility for them, you can be registered as a capacitor on your child's tax record to act on their behalf.
Online ReturnL The ability for a child to sign does not have any impact on an online HMRC account when required to file Self-Assessment online. It must still be filed online in their name so you need a UTR - this is required to file tax returns.
One subtle difference is that if a child is due to pay tax on earnings or gains and they do not, the parent or legal guardian becomes responsible for paying the child’s taxes out of their own income. This is unlikely for most children unless they are ‘stars’ or child prodigies, income is unlikely to exceed the personal allowance of £12,570pa plus £5,000pa 0% tax personal savings allowance and £2,000pa 0% tax dividend allowance.
By filing tax returns, children are able to pay tax and reclaim overpaid taxes in the usual way.
Students
Students are still subject to income tax rules in the same way as any child regarding summer work, weekend bar, waiting on and shop work, the only caveat being that parental contributions for study costs/accommodation and other scholarship awards are not subject to income taxes.
