If we want to expose costs to tax office we need an invoice. But what if a person (affiliate partner or freelancer for graphic design) is individual person without company. Than he can not send us the invoice. Does that mean we need to employ every affiliate partner or freelancer to expose costs? It can be complicated if you have 100+ affiliate partners to employ all of them and each time every new one. Also there can be more than 30% of taxes for every employer. Is there any easier solution? How ads companies are paying to individual persons for their website space to expose costs and to not pay too much taxes for each person they are paying them?
HI, You need to address this question to your Accountant. In general, and I am not an accountant, any funds that you use to pay someone are a business costs that you 'remove' before calculating your own business income. Sam
Hi, I think the OP question was more along the lines of, how do you keep good books when you might have say, 300 'small time' purchases to freelancers, small webmasters etc. and the answer is that there is no shortcut, quick fix method....well, maybe a bit You really do need to keep a record of every single transaction. And while most small time webmasters, freelancers etc. will not invoice you (I usually don't ask it of anyone unless it's over £100) my advice is to make sure ALL your online business is run through separate Paypal, Epass, etc. accounts. Just how in an offline business, only a fool would use his own personal account as his business account, the same applies online. This way, when filling in the books, or passing everything to your accountant , there is a clear record of ins/outs. Example: My April Paypal Account For every OUT (money sent) I can see - Total Sent - Recipient (email id) - What it was for (Using the comments field is VERY important when sending payments - The date of payment So, (made up numbers) when my accountant declares for me that Goodings Media received £20,000 and spent £8000 on expenses and services, I know that my paypal monthly statement will have a history of around 300 small transactions that will have a final balance of £12,000. Then for arguments, I draw £4000 and leave £8000 as a float. Come the end of the year, when I declare we had a turnover of £240,000, of which £144,000 was profit, I have a clear record of exactly who received that other £56,000 and what it was for. Im not 100% sure on expenses if your investing in anything that could be considered an asset, i.e. a website. Thats why I send everything to an accountant Hope you find that useful
It seems that in Europe it is more difficult. It turned out that the best way would be to find a company (could be also offshore) which would do all transactions to providers and take care about taxes. Than we just pay them let say 10% and they write invoice every month in name of their company addressed to our company. What do you think about that? Is there any agency/company which is doing that?