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Amazon Associates tax return - UK

by cooler1
10 replies
I haven't yet got around to filling out my tax return with the HMRC so I need to get it done. For those who are familiar with the process, I have some questions id appreciate help with.

1. Are the earnings which you have to declare the amount which you recieved between 6th April 2011 - 5th April 2012 or do you have to declare the amount you earned between those dates?

For example, if you earned £8000 between those dates, but only got paid £6500 into your bank account between those dates, should you declare it as £8000 or £6500.

2. Are you supposed to declare the amount after the bank takes away the check commision fee or the amount before it?

The bank takes about £8 per check and the amount you get is shown as NET proceeds on the form they send you through the post.

3. Can you declare the following 3 things as business expenses; Domain fees, hosting fees and broadband internet bill.

4. On the HMRC online form on page 1, it asks you to provide the name of your business. What should you enter here, being an Amazon affiliate?
#amazon #associates #return #tax
  • Profile picture of the author Alexa Smith
    Banned
    Originally Posted by cooler1 View Post

    The bank takes about £8 per check and the amount you get is shown as NET proceeds on the form they send you through the post.
    I'm not an accountant, but you have to declare what you've earned, and your deductible expenses, in separate places on the form. You declare the "full amounts" but an amount for "banking costs", which covers all the £8 payments, can be deducted from it in order to calculate the taxable income. It's all explained both in the booklet accompanying the tax return and on the HMRC website.

    Originally Posted by cooler1 View Post

    3. Can you declare the following 3 things as business expenses; Domain fees, hosting fees and broadband internet bill.
    Yes, normally all of them are deductible expenses. The principle is that you can claim as deductible any expenses which you necessarily incurred in the course of earning your income.

    If you work at home, you can also claim, in principle, a proportion of all your domestic bills (heating, lighting, rent, etc. etc. etc.) but you should discuss that one with an accountant first (especially if you own the property, because there can be later CGT implications, on the sale of the property, even if it's a designated principle residence, if you get this wrong).

    Originally Posted by cooler1 View Post

    4. On the HMRC online form on page 1, it asks you to provide the name of your business. What should you enter here, being an Amazon affiliate?
    Your own name (assuming you don't have a bank account in a TA/DBA name or a ltd. company, or whatever. If you're a "sole trader", just your name).
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  • Profile picture of the author cooler1
    @Alexa Smith. Thanks for the answers.

    Does anyone have an answer to question #1?
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  • Profile picture of the author cooler1
    Originally Posted by Chris Kent View Post

    Big companies use the accrual method but you can choose between accrual or cash method. Cash method is when it hits your account. This is what I do.

    There are benefits to using the accrual method but for a small-timer like me it's not worth the hassle.
    On the HMRC self assessment form, on the turnover section it says on the help that the figure you need to enter is;

    It is the money due to you up to your end of year - whether or not you have actually been paid.
    So when you say the cash method is when it hits your account, are you refering to the figure which you need to enter in the turnover section? Because the way it's explained in the help section sounds like you need to enter the amount you've earned, not the amount paid into your bank.
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  • Profile picture of the author cooler1
    Originally Posted by Chris Kent View Post

    There's a discussion on it here:

    Cash Basis vs Accruals Basis for small businesses | AccountingWEB

    Strictly speaking, yes you should only use the accruals basis. I'd wager that many do not though, especially if it makes near-zero difference to your return.
    So wouldn't there be any problem if I just enter the amount I got paid between April 2011- April 2012 instead of entering how much I earned in that period?
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  • Profile picture of the author cooler1
    Originally Posted by Chris Kent View Post

    I'm not a tax accountant but think about this:

    is there any real difference between the two?
    Come to think about it, it would be wrong using the accrual method because with Amazon items sometimes get returned so the earnings report often isn't the actual earnings, so you don't know the earnings until payment.
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