Tax free earnings for teenagers are capped at £1,000 per tax year. Thousands of young people who have finished their exams need to be aware that they may have to declare their income to the tax man and pay National Insurance contributions on summer jobs.
Traditionally teenagers wishing to earn money after finishing their exams have sought work in the retail or hospitality sector. However, both these industries have taken a hit over the last eighteen months and jobs are not as readily available as they once were.
This has led to many young people using their initiative and coming up with their own ideas to generate income through part time work.
This could include pet sitting or dog walking services for those owners who are now going back to work and having to leave their pets alone all day, gardening work or offering tutoring services to younger children. But by doing these odd jobs they will in fact be self-employed for tax purposes.
The good news is they can earn up to £1000 of tax free earnings per tax year without having to worry about the tax man, but if they are lucky enough to earn more than £1000 in a tax year, they will need to tell HMRC.
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