Children can earn serious money on YouTube
Anyone, can pick up a phone and film something these days. Anyone can then upload these videos to YouTube and start a channel. And anyone can start earning money on YouTube, And when we say anyone, we mean anyone – a significant proportion of YouTubers are children under the age of 16. YouTube’s top earner, Ryan Kaji, makes videos with his father and earns over $26 million every year. The 5-year-old Anastasia Radzinskaya is new on the scene but earns over $18 million.
Your child may want their own YouTube community. Maybe they already have a channel, and it is racking up views and starting to earn a little pocket money – or even a small fortune. If you’re a parent or guardian you’ll want to manage this income efficiently to act as a springboard for their future.
YouTube taxes for children
For the most part, you can treat the money earned on a child’s YouTube income the same as you would an adult. Taxes still apply, and an adult will need to keep records, inform, and pay HMRC accordingly.
The tax threshold in the UK is currently £12,000 – meaning that your child can earn up to this amount without paying any tax at all. Every pound they earn over that (less any allowable expenses, of course) is taxed, at a rate which is dictated depending on what tax bracket they fall into.
Child YouTubers don’t pay National Insurance
There is one key difference between child YouTube stars and adult YouTube stars – when they earn above the tax threshold, children do not pay National Insurance. Apart from this, they are still taxed like any other earner.
Expenses for child YouTube stars
YouTube is immediately accessible for anyone with just a smartphone, free editing software, and a bit of effort. However, that isn’t to say that there aren’t any expenses. Materials to create videos and props, travel to film in different locations, payment for professional services – for example, accounting and editing – all of these things cost money.
Keep track of your child’s expenses. These costs can really rack up, and if you aren’t reporting them as expenses it’s like pouring money down the drain. We discussed in a recent blog how even clothing can be claimed as an expense for YouTubers in certain situations.
It can be difficult to know what to expense (most people want to claim all possible – without overstepping the mark). It’s widely recognised that it can take a considerable amount of time to build a following and during that time expenses will be incurred this is where offsetting in future years can pay dividends. The Showbiz Accountant can advise you- they are accounting experts in the entertainment industry and can point you in the right direction when it comes to taxes, YouTube, and what to expense.
Your child’s money – your child’s future
This article doesn’t specifically look at planning for the future, but we would be silly not to include at least a mention of it. The Showbiz Accountant can help in this area too.
No matter how your kid is creating on YouTube, and whether or not they decide to become a full-time YouTuber in the future, make sure that they are paying the correct taxes if they are earning money. Unsure where to start? Contact The Showbiz Accountant for a free, consultation so they can point you in the right direction, to ensure that your family gets likes, subscribes, and views rather than any nasty financial surprises.