There is a way that you can get tax back without even having paid it in the first place – for example if you have earnings that are lower than the UK personal allowance so you are not required to pay any tax on them – or even if you have no earnings at all.
The way to do this is to contribute to a personal pension. Everyone is entitled to make a certain level of contributions to a personal pension (including children) and to get tax relief on those contributions.
The current maximum level of contributions, for those who do not have sufficient or any earnings) is £3,600 per year gross and you can get tax relief at a rate of 20% on those contributions (figures as at 2015). This means that you only need to pay in £2,880 to be credited with the full amount of £3,600. So effectively you could make £720 on your initial contribution to a pension without having to do anything.
As another example if you paid in £100 per month then you would be credited with £125.
To work out how much you need to pay you need to multiply the gross amount credited to your pension account by 100/80 (as you pay 80% and the tax man pays 20%) so for example:
40 x 100/80 = 50
However, the problem is that if you have low earnings then you may decide that you can’t actually afford to pay into a personal pension and so it might well be only a small percentage of eligible people that will be paying into a personal pension under these rules. Also some plans set a minimum contribution limit of £20 a month and even that may not be affordable. But if that is the case with the provider you are looking at then shop around and you will find some personal pension schemes that allow for a lower monthly contribution (for example the Virgin Stakeholder Personal Pension).
Even a small personal pension will help when you come to retire although you may well be able to take the whole fund as a tax free lump sum (trivial commutation) if your total pension funds are small enough. Although 75% of your commuted pension fund is taxable, 25% is tax free and if your earnings for the year you cash in your pension are low then the tax bill may be minimal.
As mentioned, personal pensions are open to children too and, as long as the pension is opened by a parent or guardian, anyone can actually pay into it. Obviously the child will not be able to access the pension funds until they are 57 (under current rules although this may increase by the time they get to retire) but this may be a good thing as other plans may come to fruition at 18 when they might possibly spend the money on things you may not want them to! This will also give them a head start on having a retirement fund and the benefit of an extra 20 + years of compound interest which would easily potentially double the amount they would have otherwise.