Tax management and financial advice for child content creators

Tax management and financial advice for child content creators Alex Robertson June 10, 2024

For many parents, it’s a bewildering world. That someone so young can utter the phrase ‘I stream COD live on Twitch’ and not only expect to be understood, but also to make money from it, can be unfathomable.

And yet, they do (Twitch is an online video platform; COD is Call of Duty), and gamers and other content creators are generating significant income on Twitch, YouTube, TikTok and Reels. Those who are doing so can be making good incomes at a very early age.

And for parents, carers and agents, this creates issues. While minimising taxes is a natural concern, the primary focus for child content creators should be on responsible financial management and well-being. 

But let’s start with taxes. Children in the UK have different tax obligations to adults. 

Children under 16 aren’t required to file a tax return unless their annual income from self-employment (like content creation) exceeds £12,570. Additionally, income from savings or investments that pushes their total income above the personal allowance (around £12,570 for 2023-24) might trigger a filing requirement.

For children under 18, a parent or legal guardian must be involved in all financial matters, including tax filing and managing income. This ensures responsible financial management and compliance with tax regulations.

But, even if a tax return isn’t mandatory, it’s wise to adopt responsible tax management practices from the outset:

  • Record keeping is king: As ever, you should maintain meticulous records of all income and expenses. This includes platform payouts (YouTube, Twitch, etc.), brand deals, merchandise sales, and business expenses (equipment, software, travel). We can help with this, of course, but also consider expense tracking apps specifically designed for content creators.
  • Eligible expenses: Similar to adult creators, some business expenses can be deducted from a child’s income to lower the taxable amount. We can help ensure these deductions are legitimate. Potential deductions might include:
    • Software subscriptions for editing or recording content
    • Equipment specific to content creation (cameras, microphones)
    • Travel directly related to content creation (e.g., attending industry events)
    • A portion of internet and phone bills if used primarily for content creation

We can help you navigate child tax laws, but it shouldn’t overshadow the bigger picture: the child’s well-being and financial security. We can advise on wider financial management too – and help encourage the child to save a portion of their earnings. This helps develop responsible financial habits, including good financial management, and provides a safety net for potential tax liabilities and for the details of protecting that income, including options like a Junior ISA, to act as a cushion for the future.

So if your child is building audiences and income streams online, come and talk to us. We already have a lot of experience of working with content creators like this, and of the intricacies of child income management. Give us a call and let’s see how we can secure their future.