A basic question: How do you report your online income? (because it's sometimes easy to find it) OR shall I ask, do you report it at all?
are you talking about declaring your earnings to the government? because i dont entirely understand your question.
You add the online income to your income on tax form. In the USa if you make over $600 from a company they file report to IRS so your better off filing online income because fines and penalties will cost you alot of money.
In the UK you have to register yourself as self employed with HMRC and you will then be sent a self assessment tax return before the end of the financial year. If you incorporate then you have to do a corporate tax return and if you need to do a tax return or not will be subject to the normal PAYEE rules (you need to be making very large shares earnings or have massive savings to have to do a tax return when you are an employee as the company is responsible for doing your earnings tax elements at source)
Never sure what people strictly mean by online income but most our business is both found and paid for online. Yes, any money that the company makes is taxed - though naturally you offset what it costs to run the company and only pay tax on the difference between the two. Of cause you could try tax avoidance but I personally have never fancied going to prison. As most our clients are businesses and therefore our invoices will be going into the tax man as a cost for them it wouldnt take too much intelligence for the tax man to see that companies have reported that they have paid us £x but we have reported that we have only received £y that something fishy is going on. Even if they didnt work out it was, being the cause of one of our clients being investigated by HMRC isnt going to go down well. Our taxation is a sliding scale too subject to your earnings but unfortunately no matter what tricks I can legally play I am still in the 40% band which really isnt very hard to get into
what if......for example, you register an offshore Cyprus/BVI/Gibraltar company with a bank account...and receive direct payments from CJ is that possible? will CJ/Google send direct bank account payments to offshore companies? does anyone have any experience with that?
I just report it in "other income". For those asking about suggestions leaning towards tax fraud, do keep in mind that if you get caught you're looking at a large number of years in prison!
why is that? everything seems legal to me - i mean using offshore company + offshore bank account any lawyers here?
Ok.... offshoring, whilst the company retains the money there is no tax to pay which is fine if you intend to use the companies earnings as a savings account. As soon as you draw any money out of the company however it is then a form of income and so tax would have to be paid as per the country you are domacile in. I have used this type of setup before but I knew when I set the company up that it would be run for 2 years, I would draw no money out of it and I would then liquidate the company. I had to pay capital gains tax on the money but you get a capital gains allowance each year which is tax free and seperate from your income, was able to split it between myself and my partner and so get 2 capital gains allowances and my partner had a larger shareholding which meant more of the money went her way as a lower rate tax payer. The offshoring simply saved us the corporation tax rather than any income tax - the rest of it could have been done with the company being set up in the UK