Self employed 17 year old - tax/NI?

[WoozlesEverywhere]

My 17 yr old dd has been offered a job caring for an individual who gets benefits to pay for the care. The mum who offered my daughter the job has asked that she be self-employed so that she can submit my daughter‘s hours to claim against this benefit. The job is for about 28 hours a month, possibly more in the summer holidays. So she will earn less than the £1048/month threshold for NI. She is a full time student.
What does she need to do (if anything) to make sure she doesn’t fall foul of HMRC, national insurance etc. Does she need to declare anything/tell HMRC? If so, how? Thanks

There is a lot of advice about self employment on the HMRC website, so maybe take a look on there.

Your daughter will still need to register as self employed and do a tax return even though/if she doesn't earn enough to pay tax or national insurance.
I'm self employed and it's really easy to do, so don't worry about it.
The first step is for your daughter to register for an online tax account. The first tax return won't be due until April 2027 (for monies earned from 5/4/2026)

My online tax return for the tax year April 2025/2026 can be submitted anytime between now and 31 January 2027.

Thank you for your reassurance, i have a fear of these official processes, having always been PAYE. I’m glad it’s not too daunting. Should she register straight away or wait until it’s due next year? Is the self assessment form very complicated?

I would be concerned that this would possibly be inside IR35. Hmrc have really cracked down on this stuff because people are trying to circumvent employment costs by asking someone to do an effectively employed job but be responsible for their own tax and ni. I think the rules have been tightened up, so just bear that in mind.

Looking at the rules I suspect she’d be ok - she’s not setting up as a ltd company or anything? In which case she’s probably fine, but worth double checking. https://www.gov.uk/guidance/understanding-off-payroll-working-ir35

Definitely check if she is genuinely self employed. Seems similar to a nanny role who would be an employee.

If she is self employed she would need to register as self-employed when she starts work. Any tax and NI on money earned this tax year would be due in Jan 2028 so if she does go over the personal allowance make sure she saves this money. There is an option to pay NI class 2 if she earns less than a certain amount. If over then she would get NI credits but not need to pay until class 4 is due.

She can claim expenses e.g. mileage or the use £1000 trading allowance.

She should submit invoices as agreed. The form is straightforward as long as she has kept records. Spreadsheet would be fine.

She may want to research whether she needs any insurance cover. If she does need this then her hourly rate should reflect this as well as not receiving holiday pay or sick pay which she would get if she was employed to do similar work e.g. through an agency.

The local council adult social care department might be able to advise but I'm wondering if these is one of those jobs that doesn't really pass the HMRC SE test, after all, its a similar job to a nanny and they're almost always considered to be employed.

I was under the impression that they would be able to employ rather than contract a carer this way and use their benefit money towards payment.

The motivation for the 'employer' in these circumstances is usually to avoid their responsibilities for NMW, employers NI, sick pay etc, so make sure you and your DD are clear of her status and entitlements.

It sounds like it would nto pass the SE criteria for hmrc. Presumably she cannot choose the hours she works for example. The employer is avoiding paying ni, tax, sick leave and holiday pay by requesting this and it is not to your dd’s advantage. Not sure how it meets the benefits criteria, presumably paid from PIP, as you do not have to submit any invoices to receive it.

The insurance part immediately sprang to mind - this is very important for your daughter.

Tbh I would look for another job. They try to take advantage of her.

Thank you everyone for your help. I know what sort of questions to ask now.

@WoozlesEverywhere it seems like your daughter might not be classed as self employed (as pp have said, the person engaging her service might be trying to swerve nmw, sick pay , holiday pay etc)

But if it's definitely self employment then your DD should register within the current tax year

Honestly it's not difficult to complete a tax return in these types of work, but keeping accurate records make it so much easier.

I keep a daily tally of money earnt, miles travelled and any supplies/ products I buy.

I also claim expenses for my work uniform (and cost of laundering it) for example.

Good luck and your DD sounds like she's sensible and hard working.

To be classed as self employed she needs to be able to:
choose her own hours - this can be picking and choosing shifts
be able to send a substitute- this is a key one that it is a service you are providing not a certain person
supply her own equipment
supply her own uniform/clothes
Hidden employment is very high on HMRCs agenda currently.

There’s a tool on the HMRC website to check if the role would be regarded by them as employment or not. I think it’s a bit biased towards employment, but at least you know what they think.

https://www.gov.uk/employment-status/selfemployed-contractor

All of these tests are not set in stone but give a general pattern, if the care giving is more on an ad hoc basis like other teen age self employed jobs like babysitting, lawn mowing and dog walking then it's self employment but if it's more every Tuesday night from 6-9 and Sunday 10-2 without exception then that's more an employment contract.

Thank you, that’s good to know. It will be more flexible than a usual ’job’, so they’ll work together to find shifts that work for both of them, so hopefully she won’t fall foul of the IR35 rule. Also, she does the occasional shift waitressing, so she can invoice for that, which should help to show she works for other people too.

Self employment is complicated obviously a teen working at a coffee shop every Saturday is an employee but if same teen babysits for Mr and Mrs Smith most Thursday evenings so they can go to running club it's self employment you can only earn £1000 a year without declaring it which at £8 per hour is only 2.5 hours per week obviously there would still be no tax to pay doing more hours unless it was more than 25 hours per week, but self employed tax returns are not difficult in her situation just a simple diary with hours worked and what was paid, it seems unlikely there is any expenses that are tax deductible you can't claim travel from home to work, you can't claim for work clothes unless they are logo'ed she wouldn't need her own supplies .If what she is doing is more like being on the premises and making a meal or snack while they have a social life it's more like babysitting than if she was on a care rota and responsible for giving medication assisting with bathing toilets getting dressed etc which definitely needs a pry contract and training

Im pretty sure that IR35 doesn't apply to sole traders so I don't think you need to worry about that. You've had good suggestions above, it seems like having a self employed cleaner or gardener or dog walker or similar, none of those would be employees

Thank you. It is more like baby sitting, making a snack, entertaining them, etc than an actual ‘care role’. Certainly there’s been no talk of her giving medication or bathing them etc.