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I expect to earn more in the future, worse case scenario another $100 in 2006.
(I live/work in the UK)
The important thing isn't where you deposit the checks or EFT payments, but how carefully you keep track of your earnings and expenses.
If there are no real pros/cons then I may as well use the business account so that when it comes to filling out a tax return, I can easily get the info that I need.
My business account is currently with HSBC (with £0 balance!) and they DO have charges as I've had the account open for years.
I think I'll just close down the HSBC account and switch to Barclays then as they have a 'No charges until you have £10,000 balance' or something similar.
Ok, 2nd part of my question...
What do I do about Mr.Taxman? I'm earning a full-time wage and Adsense is simply beer money at the moment. What should I be doing? Do I declare it? Do I need to contact an accountant as I have no idea how to fill out a tax-return.
I don't know anything about UK tax laws, but in the U.S., you'd normally declare your small-business income on Schedule C, which is a form that's used to record business earnings, expenses, and net profit or loss. The net profit or loss is then transferred to your main tax form (Form 1040). I imagine there's something similar in Britain. Your public library should have information on taxes for small or home-based businesses, and if you buy tax software, the software should have a questionnaire that walks you through the steps needed to declare business revenues, expenses, and profit or loss. (I use TurboTax for my U.S. taxes, and it makes the process quite easy once you have a broad understanding of the revenue/expenses/profit or loss concept.)
I think you would probably put this through as if you are a sole trader. I cannot really comment as we run as a Ltd company, where it is a bit different.
But essentially if you are running as a business then you pay personal taxation on whatever you pay yourself out of the business...whether as a employee or sub contractor.
Corporation tax is only due on profit, which does not include salary etc. I think it is 22% under £1 million.
Anyway, I doubt any of that would apply. Check out [businesslink.gov.uk...] for details and links.
Adsense income would need to be declared in the "self-employment" section of the tax return, along with any other income earned outside your regular employment.
If, as you say, you're only earning "beer money" at present, then the tax office is likely to class your adsense as a "hobby". If it increases to a level where you could legitimately call it a business, you will need to let them know you are "self-employed" - and yes, you can be both employed and self-employed at the same time.
At that stage, you would of course pay tax on any profits from self-employment, but you can legitimately offset expenses such as hosting, domains, etc against your "profits". Obviously you would need to keep back the percentage of your adsense income to donate to the taxman, at whatever rate you're currently paying.