This in follow up to another post I made in the AdSense forum. If you are paid any money through PayPal (e.g. from Clicksor), do you pay tax on it in UK? If so, and I assume you do, would this apply to any money you earnt selling stuff on ebay.co.uk? Is there no minimum amount you must earn before tax kicks in? If Clicksor transfered $20, would it have to be declared? Similarly, is there limit to tax on cheques- if google sent £60, would it be taxable? Thanks very much- the reason that I am asking is because it seems very unlikely that you would have to pay tax on a £10 transfer! I am there is someone here from the UK who uses Clicksor/AdSense
The only right answer is that you should be filing any income you have with your taxes. I wouldn't take someones advice that £15 is ok because you won't get caught. If you are running a business you have to disclose all income.
If you sell what is deemed your personal possessions then there is no tax to pay, unless such activity is deemed to be a business. EG. you sell your dvd player for £20 on ebay, and some other stuff including clothes you no longer wear etc. No probs as these are in the long term unlikely to pass the amount you paid for them. The way they look at it is that say you make £500 in sales of goods, but the overall purchase value was £2000 new. You have actually made a loss so there is no tax to pay. IN fact, if you declared it as a business then you could claim the tax back. If you are selling advertising on your site, then it is a business and you must keep business records. At the end of the year you must complete a self assesment tax form and send it into your tax office. You should also be paying class 2 (i think) National Insurance payments. OK Now the upside. ALL costs incurred in the running of your business can be deducted, so you can claim for your broadband connection, your computer, your power usage, your hosting etc. At the end of the year the tax man might well owe YOU money
Damn, beaten to the punch. One thing I assumed though is that you are actually paying tax from your job. If you are NOT earning, then you have a personal tax allowance, which is the amount of money you can earn before paying tax. This varies, but is around about £4-5k a year. Speak to the inland revenue helpline though. Tell them you are considering this option. They are very helpful. http://www.hmrc.gov.uk/
here is a rough simplified guide first of all nearly every thing is taxable in nearly every country. If you are a UK citicen or llive here (there) and are a citicen of an EC member state any income or profit you make in the UK is taxable in the UK. If you are a citicen of another country not in the EC you may even be taxliable in your homecountry as well (exept if double taxation treaty exists). Assuming youre not a registered company but maybe a sole trader your income and profits are taxable after allowances and cost have been applied. So you buy something for £10 and sell it for £20 and the actual sales cost you £2 (postage hosting whatever) you made £8 income or profit. Thats why one needs a bit of basic bookkeeping and needs to retain some records. Same as if you had £1k in the bank they pay you interest on the interest you may be taxliable and thus need to declare this. But there are allowances below which you don't need to pay tax but you need to declare it. Also be aware in the UK if you are hugely successful and your turnover is more than I think 60k you have to VAT register even as a sole trader. Below this it's volutary. But not being VAT registered means you can't apply VAT and you can't get the VAT you paid back... So if you are for example employed and also dable on the net but start to make some turnover e.g. regular payments by G etc. talk to an accountant probably best to have a sole trader ship which allows you to have simple books and resonable offsets. e.g. hosting £300/year broadband (exclusive for this - but can be wireless) £200/year domain reg, books, training, etc ect etc total of £1k etc vers G income of £1k - no income/profit! This is a very rough guideline but that's about how it works. see http://www.qck.com/personal-tax-guide.html So I have an accountant who cost me about 1K (it's for a company) a year who legally saves me 5K a nice 4K I have to pay no tax on! Expat
I think the key term is income from "carrying out an activity in the normal course of business." What you must declare is your profit. If you are self-employed or a limited company I would advise you to declare if your meet the above conditions. Otherwise do not talk to HMRC. The UK government gets enough tax and wastes enough tax payer's money as it is.
I am gonna talk to the 'taxman'. However, even with the ads, I am still losing money overall (hosting costs). It will probably cost more money to process any tax I pay than they will get anyway! I don't want to risk getting done, though Thanks!
Another tax related question: I am underage and I make some money from scripting, webdesigns, selling domains, selling sites, and adsense. What do I have to do, do I have to declare anything ( live in Holland btw )?
That is fine just keep some basic records. E.G. c-card slips for hosting brodband or other costs ... basically all costs reasonably related to this.... and balance again any income / simple T accounting will do cost income 250 250 0 profit/income no probs typical costs 200£ host (dedicated to just this domain) 50£ BB (25% of overall as 25% deemed to be used for this purpose) The ideal is to have dedicated services e.g. e-mail account for private at yahoo or so hosting seperate for just this connectivity like BB for just this or use a real reasonable %age. Skype in just for this (if its reasonable that people may want to contact you) etc etc etc If you have to drive to meetings like business networks etc that milage can go in at 0.40£. Always keep it reasonable - you can't offset you brand new car aginast it (well maybe if you have 4 others ....) So as long as this T accounting shows 0 or - you can always say I have nothing to declare as I make nothing.. Take care and best of luck Expat PS If it grows a bit or to keep control one way is to simply open another bank account get a c-card for it and run everything through this, thus your monthly/quarterly slipe have the accounting on them for you
My god, for the first time, having aol dial-up has beeen an advantage! Since it is so ridiculously expensive, unless I earn more than around $300 (hosting + aol)- (which is EXTREMELY unlikely) there is no way I'll pay tax! Could one include computer fees, even if its main use was not running fusionnx.com?
When it comes to taxes, allways take the advice of an accountant. At the end of the day, it's all down to whether you're carrying out the activities as a business - ie do you forecast (or can be reasonably expected ) to show a profit within a reasonable period of time. If the answer is yes, then you can offset loses against other incomes - losses can be hosting, connectivity, car mileage, phone costs, computer costs etc etc - if the answer is no, then the IRS (within the UK) will just ignore your claims. An accountant is best placed to advise you on the best way to procede. If you make a profit (or expect to), then you need to keep records as the IRS can ask to see them - ask being a polite way of putting it. Accountants don't need to cost the earth, I pay £300 per year for mine and he seems to do a pretty good job as far as I'm concerned.