|How much can you earn?|
UK tax question
I have an few affilliate sites and they bring in about £300 - £500.
I also work full time.
How much can you earn on the side?
Nothing, if your main salary exceeds the UK personal allowance (something around the £4k PA mark).
It's all taxable, technically.
On the long and less than concise form that I have to fill out for the UK tax authorities, one has to include income from all sources. ie paid employment, interest on savings, part time jobs, capital gains, etc. They cover everything you could possibly think of.
You are very lucky if you have never had to fill one of these things in :(
I'm from Canada, so can't comment on UK specifics, but be sure to keep good records of whatever expenses you incur to earn your affiliate income. You should be able to deduct your expenses and only be taxed on the net amount.
An accountant once told me that a lot of folks miss a lot of deductions simply because they're not adequately documented. Keep a good paper trail!
>but be sure to keep good records of whatever expenses
Thats good advice, there is a lot you can claim against the earnings, of course you have to declare the earnings first ;)
I would stongly recommend seeing an accountant, there are lots of them out there that can give good cheap advice. Ask around amongst friends, try and find the ones who deal a lot with self employed contractors [builders, plasterers etc], they will be very economical and easy to "talk" to.
ok cheers guys, ill get on the case.
Shhhh, If you're earning money keep quiet or Gordon Brown will nick most of it :-)
Online earnings of those amounts may be liable to income tax etc but may be exempt from VAT. However, what you spend online to promote your sites, pay for hosting etc may be deductible. A good accountant is a must.
Let me give you the official right up to date ( I think ) tax calculation.
First £1,500 = 10%
Next £26,500 = 23%
All remaining Taxable Income = 40%
The first £4,335 is tax free.
Here's an example.
Non-savings income of £30,000.
Allowances £4,335 - taxable income is £25,665.
>> All remaining Taxable Income = 40%
Lucky i am in US - but unlucky i moved out from india :)
2003-2004 Lower Rate Tax Band £1,520 Rate 10%
Basic Rate Tax Band £1,961 - £30,500 Rate 22%
Higher Rate Tax Band £30,500+ Rate 40%
Allowances & Reliefs: personal under 65 > £4,615.00
Married couple's allowance > £2,150
Blind person's allowance > £1,450.00
Widow's bereavement allowance > £2,000.00
Income limit for age-related allowances > 18,300
(note: don't know what this means.)
Whatever you do play straight and don't let to many people know.
Source: Rate UK [rate.co.uk]
Does anyone know if the google adsense program is subject to VAT on the publishers side? (i know that advertisers pay vat)
I could be very wrong, but from the 1st of July all online advertising bought within the UK is subject to VAT. Watch all the regionals suddenly gain a UK office for exactly this reason, if they don't there share of the UK market, second to the U.S. goes to the ones that have. This is my take from what i have read.
Chat with an accountant, it isn't what you earn, it is what you keep that counts.
You may have a lot of expenses which need to be taken into account, ... costs of servers, design, marketing, commissions, etc etc.
These reduce your over all liabilty.
|I could be very wrong, but from the 1st of July all online advertising bought within the UK is subject to VAT. Watch all the regionals suddenly gain a UK office for exactly this reason, if they don't there share of the UK market, second to the U.S. goes to the ones that have. This is my take from what i have read. |
No one sets up a UK registered office unless they enjoy red tape and taxes or cannot avoid it. AOL and eBay who by virtue of their size were obliged to register in the EU have chosen Luxembourg which is the most benign, as far as tax laws are concerned, of the EU countries.
As an aside it is interesting to note that the the standard of living in Luxembourg is among the highest in the world, if not the highest. They also have a falling tax-to-GDP ratio and the lowest rate of VAT in the EU. Instead of trying to emulate their successful policies and learn by them the other EU countries are busy creating regulations and red tape to force Luxembourg to march to the beaurocratic drum and become as burdened by tax as they are.
You need to declare it. If you don't, they will fine you and charge you up to seven years back, which usually needs to be paid in one go. If you don't have records, they will estimate the amount you should have paid based on current financial income - so you may pay a lot more.
Also, you will be on their records as a 'Tax Avoider' and they will inspect you more often (as you will be classed as self-employed and employed). They will be less forgiving with you, unhelpful, and basically force you into proving every income and expense.
Your business needs to register for VAT if the turnover is over £56000. This is separate from your employed income, but would be all your businesses incomes added together (if you run more than one). i.e. you cannot run 10 business with a turnover of £10000 each to avoid VAT.