Martin Lewis issues warning to all parents over child saving accounts
All parents with children have been issued a warning from financial guru Martin Lewis. During the latest episode of his ITV programme, The Martin Lewis Money Show, he left many watching from home and in the studio audience in shock as he gave a word of warning regarding child saving accounts.
The vast majority said they don't think children have to pay tax. However, they were quickly proven wrong as Martin revealed that in fact, they do - and there could be legal trouble if you hand them too much money, as reported by Yorkshire Live.Martin explained that children do actually pay tax and that they are legally considered 'taxable entities' by the government. He said this then means any money children earn can be taxed mostly just like an adult's earnings would be.
"This is important to understand. If the money you give them earns over £100 interest per year, and that's per parent, then it would be taxed at the parent's rate, not at the child's rate." Martin said. He continued: "But, what do you do about it? Well, if they're gonna earn more than £100 and you pay tax on savings then that's where a Junior ISA comes into its own."
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