Forum Moderators: martinibuster
I made a quick calculation of how much tax I can expect to pay - and it's a lot! :(
So, my question for the more experienced is: can I invest a portion of my Adsense earnings into Adwords and claim it as expenses to lower the taxable base? Will Inland Revenue accept Adwords expenses as valid?
I know I should ask an accountant, but your personal experience will be satisfactory for me for the time being.
My other option is to found a company in my home country (which I am a citizen of) with flat 19% income tax and keep all the earnings there.
Adds - you said "Anything you spend on running the site which brings in income from adsense is legitimate business expenditure, and therefore is tax dedutable." You also mentioned web hosting as a deductible.
Have you, (or anybody else), actually done this yet - claimed web hosting, software, as tax deductible on your self-employed tax declaration form? The only reason I ask is because an accountant told me that that only hardware could be reasonably claimed, (and at a diminishing value). Things like software and web hosting were just seen as "incidental expenses" and not tax deductible.
Thanks
I claim about everything that's related to my business. Web hosting and domain names, my new notebook, cell phone costs, my internet connection, ...
My accountant says this is fine. Claiming my holiday to Greece this summer as a business expense is not OK she says ;-) Although I'm sure I could create quite a lot of webpages about the place I'm going to.
Have you, (or anybody else), actually done this yet - claimed web hosting, software, as tax deductible on your self-employed tax declaration form? The only reason I ask is because an accountant told me that that only hardware could be reasonably claimed, (and at a diminishing value). Things like software and web hosting were just seen as "incidental expenses" and not tax deductible.
There are 2 possibilities
1.) The tax system in Your country is completely different from the tax system in Austria
2.) Your accountant is a complete moron
Imagine, there are software packages far more expensive than todays cheap hardware.
2.) Your accountant is a complete moron
applies here ;)
If you're running an online business, you can definitely claim for domain names, software, hardware, hosting etc.
Get a new accountant, one who is familiar with new media.
p.s. thankfully the accountant was not my accountant, just an accountant :)
No, I live in Belgium..
Our tax laws are a bit different but it would be really weird if you couldn't claim hosting and software on your tax return form in the UK.
you're UK based and you've claimed these things on your UK tax return?
I am, and I have.
Right, now to go back through my files and dig out all those little buggers!
However with a decent accountant making sure all that you can legitimatly claim is claimed, the tax burden is in my view pretty light. Certainly I'd say I pay a lot less tax on income than if I was employed.
Claiming my holiday to Greece this summer as a business expense is not OK she says ;-)
Set up an ad channel for all Your greek holiday pages.
When the AdSense revenues are covering the travel expenses within 4 years, it should be okay to claim them.
My wife wanted this year the same region as last year, I said no, because I have covered last years holidays enough with new pages.
Certainly I'd say I pay a lot less tax on income than if I was employed.
The employeed has no business expenses.
He drives with his privat car to the company.
As mentioned before for self employeed:
The company is poor, the company pays everything, sorry, nearly nothing for taxes after all the expenses.
However, the fundamental difference between a limited company and a sole-trader is this.
Those are only ordinary differences.
Actually the fundamental difference is the level of liability/responsibility.
In a case of a ltd you are responsible for up to the capital invested in the company.
In other words your personal belongings are protected (in case something goes wrong), which is not the case with most of the other (private) types of businesses.
This is very sensible question and can't be answered in this forum.
One should seriously spend time researching the subject before final decision.
A help from accountants and local Chamber of Commerce is a must here.
As for the original question, it has been answered here several times.
In short, all the expenses directly related to the business should be deductible.
