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Babysitters, this is what you need to know about Income Tax

income tax selfemployedbabysitter Jul 24, 2022

In this blog post, we are going to be looking at tax and why it is important to understand it before you start work.  Not getting tax right could mean that you owe some of what you earn to the government and you don’t want to get caught out if you haven’t saved up enough money.

Before we start I must say that I am not qualified to provide you with personal financial advice.  Everyone’s situation is different and for your own circumstances, I would recommend speaking to an accountant.  Depending on how old you are your parents may have an accountant that you can speak with.

But in general:

The government charges lots of different types of tax to pay for things like our schools, hospitals, and roads.  Value Added Tax on the things we buy, Fuel tax on the fuel we put in our cars - and importantly Income Tax on the income that we earn.

Income tax is charged at different thresholds depending on what we earn:

For the current tax year, we all have a personal threshold of £12,570 under which we pay zero income tax.

So this is important - if you are a student and babysitting is your only job, then you are very likely to be under this threshold and you will not be required to pay any tax.

The next tier up is from £12,571 up to £50,270 and this is called the Basic Rate and is charged at 20%.  So if you earn between those bands, then anything you earn above £12,571 will have a 20% tax charged that you owe to the government.

If you have another job - perhaps you are a teacher or nurse, then you will already know that your tax is deducted from your pay before it is passed on to you.

If you add babysitting to your income then you must plan for this to be included in your tax return and also to be charged at 20%.

Now because your babysitting work is self-employed when a family pays you £50 you receive the full amount - and if you spend that full amount you are going to find you owe the government some money (£10 in this case).

So if you are a basic rate taxpayer you should keep a close record of everything you earn, and ensure that you keep 20% of it off to the side ready for the end of the year.

Now you might think - eurgh - this is not worth it if I have to pay 20% - well firstly - that is how it is for every self-employed person, and secondly, it makes sense to look at what you are charging.

If you were thinking of charging £8 per hour, then think about charging £10 per hour instead- you can then save the additional £2 to cover the income tax.

Hopefully, this clarifies the mystery of income tax while working as a babysitter and this post will help you to stay on the right side of the taxman!


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