Advice on DS making money on tiktok

[tiktokmoney]

DS is making lots of money on tiktok. He is still doing A levels. It is not something I am familiar with at all. I have obviously given the warning about his posts being online forever. Looking for advice/experience on this situation. Also advice for having a teenager earning so much money. He is not spending it but plans to invest/trade so could lose it. Thank you

He can earn much more than £1,000 a year before paying tax.

The personal allowance (effectively the 0% rate/band) is £12,570. Then 20% tax on earnings over that until over £50,000 (plus 6% National Insurance Contributions) but he may also have some items he pays for his trade that could be tax deductible.

🤣🤣🤣🤣🤣🤣

I do have some strange things pop up on there!

I generally search for sourdough bread and cosy cottages so im not sure where she popped up.

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Surely he's capable of putting a percentage of his earnings into an easy access savings account?

Give us an idea of how much he is making… I’m so interested to know!

I'd be interested to know how much time each day he spends posting (inc any research) as well as earnings. Does he post daily or several times a week?

So many teenagers are looking to make an income this way but it's so alien to me!

What are you considering 'loads'? £50? £500? £5000? £50000? More???

He should open an ISA or a SIPP and save half for long term, he can still dabble in stocks and shares.
1/4 saved for short term wants / tax bill
1/4 for current spending

If he is earning a proper amount then a chat with an accountant would be worth while.

@tiktokmoney I would buy him this book https://www.amazon.co.uk/How-Own-World-life-changing-bestseller/dp/1473695309

As for making money off tiktok, one of my cousins DD does. I have no idea how what she posts makes money. It's all silly dances, skimpy clothing and makeup. I think she will regret it one day but she's convinced she will become an influencer.

He he - glad you asked. I also want to know but was too shy to ask 😆

He really needs to speak to an accountant OP to ensure that he is compliant with his tax responsibilities, and also needs to make sure he reads up on guidance if he is promoting anything or receiving any gifts etc as there are fines for breaching those rules. One of my friends makes money from TikTok and I know she found it a minefield to understand and ended up with quite an expensive tax bill unexpectedly, that was from someone who had experience with tax/working so I can imagine it would be even more so if she was younger and had no idea.

tiktokmoney

Personally I am happy if he loses all the money trading as it would be a good lesson in the risks and wont then stop him getting a real job! However I will make sure he keeps enough for tax - will suggest we look after that for him.
Op I know you are half joking about this but maybe try not to think like this - if this turns into his ‘real job’ then why not? He can pivot if things go sideways/ study at the same time/ learn digital marketing or something close to it. Would he save his money instead of investing for a future car/ house?

My daughter used to run a Harry Potter fan account on Twitter (before it was X) and she had thousands of followers and used to make a fair amount of money. It was time consuming though and real life got in the way. She sold the account to someone else. It was a brief moment of fame and fortune for her in her teens. She’s got a proper job now, and has no time for social media.

Is he using his real name and can his face be seen?

Is there anything there that an employer might find offensive, such as the language he's using, the topics he's focusing on, his attitude?

The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.

After that, he doesn't have to pay tax on expenses, but those expenses have to be legitimate! How much has he earned? That'll determine whether he should get an accountant.

I would really encourage him to avoid get-fast-quick schemes and to avoid crypto currency. For now, he'd do better finding a savings account with a good interest rate (he could look on Moneysaving Expert for advice there), but my main concern really would be that he doesn't burn his bridges as far as his reputation goes.

Why? Plenty of days to learn lessons but being happy for your son to lose money is a strange thing to say!

pls get some financial advice - google accountants and speak to a general one, most do free advice. You could look for an influencer specialist - I’m sure they exist!

I’d love if it my DC did something creative and entrepreneurial rather than just becoming stuck in the hamster wheel that most of us are on and trying to get off. It sounds like it’s good information based content so maybe spend some time asking him how it all works and help him however you can ?

I wish him all the best!

Over £100/150 a day even when doing nothing which seems like lots to me for this as still at school doing A levels. If it was a proper job I wouldnt say it was lots! Obviously it may not continue

So he's earning more than £12,570, which is the tax-free amount, so he needs to pay tax. There will be things he can claim against tax, but if he's earning about £4,000 per month I think he should see an accountant to make sure it's all legit. An accountant should be able to advise him how to invest, too.

He hasnt earnt 12K yet and may never do but there is a possibility and he will pay tax if he does.

It's going to be really difficult to get in touch with a tax accountant at the moment so I would start with getting him to put 20% of everything he earns into a savings account which he doesn't touch. Paying a few hundred pounds for tax advice will be worth it. He may need to register as self employed and pay NI accordingly. It's probably worth a phone call to HMRC now to see what they say. He may only be doing A levels but from HMRC's perspective if he's old enough to earn an income, he's old enough to ensure he does so in line with the law.

OK so in the meantime he needs to make sure he has receipts for absolutely anything he's bought to help him do his work. He could do with setting up a spreadsheet for money coming in and out, too.

£100 per day is £3,000 per month. Has he only been doing this for a very short time, then?

He'd need to put money aside for National Insurance, too.

OP, the main thing is that his tax money is invested safely. If he blows the rest, that would be a shame and a complete waste of his time, but he would still need to pay tax even if his investments failed.

Talk to an accountant

I really think he will, if he's making that much and not doing brand deals presumably he's in the Creator Fund - once he gets clued up on brand deals his earnings will likely x3.

Just make sure he puts aside 20% - plus NI - in easy access savings for now. 40% if he starts actively earning more than £150 a day.

I have a daughter who makes some money off youtube videos. Not anything like as much as your DS, and she’s stopped producing now so just getting a bit trickling in from the old content.

It was animation, so not physically identifying, and her dad set up an account with his details for her to post under as she was only 9 when she started. He has paid the tax on it as his income. So we weren’t too concerned about it making her unemployable or making her a target in real life for Internet weirdos.

She stopped because it was somewhat childish content for a teen to be associated with and she didn’t want to do it anymore. But it turns out quite a few kids at her new high school were subscribers to her channel and a few still watch the old content. Someone at her new school knew someone from her old school and they mentioned that it was her channel, so now the new school know too. Fortunately her fears about being a laughing stock because it’s fairly childish haven’t been fulfilled and everyone seems quite admiring understanding she was young and still appreciating her talent at the time. (She was and is a great writer, and funny with it). It’s been a good lesson in how things can follow you even when you think you’ve put them to bed.

Just to add, if he doesn't have too many expenses i.e. less than £1000 a year he can use the trading allowance of £1000 instead.

People often use premium bonds to hold tax payments.