UK Tax on website earnings?

18 replies
How does it work? The only thing I know is anything you make over your earnings (if employed) which is around 8K a year, needs to be taxed? is that right?

I also read somewhere if you make less than 2,500 a year in earnings there is another form to fill in.

All the information is confusing relating to the internet

Anyone from the UK want to help me out to understand how taxation works

Thank you
#earnings #tax #website
  • Profile picture of the author Susanrh
    Hi
    Visit hmrc.gov.uk
    they'll tell you all you need to know.

    Susan
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    • Profile picture of the author SirAlex
      Originally Posted by Susanrh View Post

      Hi
      Visit hmrc.gov.uk
      they'll tell you all you need to know.

      Susan

      Yes no doubt but who can understand it?

      Long story short - earnings on the Net have to be declared and taxed like any other source of income. As soon as you exceed your personal allowance you are liable to tax.

      Any questions I have I ring them and I've always had helpful and courteous replies.
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  • Profile picture of the author PLRExpress
    Hi,

    Any earnings that you make to yourself as self employed or to your company are no different if you are an online business or an offline business. The level of tax is still exactly the same, with the amount of tax that you pay relating to how much you earn.

    If you make the first step and register as self employed with HMRC they will then send you a pack with all of the details that you need. Even if you don't pay tax until you earn so much (can't remember how much because it changes every year) you still need to have registered as self employed and keep check of your bookkeeping anyway.

    Hope this helps.
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  • Profile picture of the author Tony Marriott
    HM Revenue & Customs: Home Page

    just to reiterate.

    If you are self employed then specific section in Pete's post.

    For tax year 6 april 2010 to 5 april 2011 you need to have your paper returnes in by 31 October 2011 or, if do your returns online, you have until Januray 2012.

    Note that to do it online you need government gateway account (free) and you will need to register your "tax return" service online also. Each registration can take a couple of weeks as they send details to your home address. So if you want to do your tax returns online don't leave it until a week before it's due or you will get caught out!
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  • Profile picture of the author blackout17
    Thanks for the posts and help guys, cleared it up alot there!
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    • Profile picture of the author realfun
      UK residents dont get taxed for anything under £7475

      Anything over that is 20% and so forth

      HM Revenue & Customs: Income Tax allowances
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      • Profile picture of the author Alan Ashwood
        Hey, on a more positive note -

        Don't forget you can offset your costs to legally reduce your tax liabilities, such as Broadband, Domain Nmae purchases, Web Hosting, Autoresponder services etc.

        It can make a lot of difference.
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        Time for a cuppa.
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  • Profile picture of the author aduttonater
    Wow, reading this has given me an idea about traveling to the UK and starting a business of some kind. Thanks alot
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  • Profile picture of the author roley
    Originally Posted by blackout17 View Post

    How does it work? The only thing I know is anything you make over your earnings (if employed) which is around 8K a year, needs to be taxed? is that right?

    I also read somewhere if you make less than 2,500 a year in earnings there is another form to fill in.

    All the information is confusing relating to the internet

    Anyone from the UK want to help me out to understand how taxation works

    Thank you
    You need an accountant man. Email one if you want free advice but usually the way it works is there is a threshold if you exceed that. ALL, not just the bit above it is taxable. ALL OF it is taxable as income
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    • Profile picture of the author Jeff Henshaw
      Speak to the Inland Revenue (or your accountant or tax adviser, if you have one). If in doubt, then submit an annual tax return and make an honest declaration of what you have earned. It's a pain in the butt, but is better than a letter from HMRC - or a knock on the door.

      As has been stated already in the thread; you need to register on-line. If you do this, not only will you have a longer period in which to submit your return, but you will instantly see an estimate of the amount of tax that you need to pay.

      Don't forget to offset all of your legitimate business expenses - they can be considerable. Indeed, many years ago when I started earning a little money on-line and I submitted my first tax return (I was still in employment at that time and being deducted PAYE by my employer) I was sent a cheque for several hundred pounds by HMRC. The first and last though!

      Just my thoughts,
      Jeff.
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      • Profile picture of the author Alan Ashwood
        There's some great advice here, but your best bet is to contact HMRC. They are really helpful to people starting a new enterprise, even if you have a PAYE job too.

        It's a pretty dangerous game for us to start quoting figures etc., as the information may ot ba accurate.

        There's a second thread around at the moment with similar content, as wellas questions about accounting, keeping books etc., at

        http://www.warriorforum.com/main-int...ml#post4802536

        It's worth taking a look as it may help you.

        Bottom line is: Contact HMRC, they WILL help; and get some free accountant advice too, even if you're going to keep your own books (as I do).

        Don't let the tax or Vat implications hold you back.

        If you get the HMRC pack and still need some translations, come back to the Forum, where we'll try to help.

        I've been self employed for over 25 years, and now I'm self employed (IM) and receiving a couple of pensions. I'm allowed to earn about £7450 before I become tax liable, but you may be different (child allowances, income support, working tax credits, family tax credits etc.) So let the civil servants earn their keep, that's what they're there for.
        It's in their interests to get you started on the right foot. They've got bigger fish to catch who really are on the fiddle.

        Good luck with your IM beginnings. Who knows, maybe soon you will NEED an accountant to handle all that money you've got pouring in.

        Cheers

        Alan

        PS. blackout17. Are you still there? Or are we wasting our breath?
        .
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        Time for a cuppa.
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    • Profile picture of the author Alexa Smith
      Banned
      Originally Posted by roley View Post

      usually the way it works is there is a threshold if you exceed that. ALL, not just the bit above it is taxable. ALL OF it is taxable as income
      This is completely wrong: that isn't how it works at all.

      Your tax-free personal allowance of about £7,500 - or whatever - obviously remains tax-free. If you earn £1,000 more than that, you're liable to pay tax on the £1,000, not on the total of £8,500. According to your "reasoning", you'd actually sometimes be better off earning less - now that would be a bizarre "tax assessment system", wouldn't it?! :rolleyes: :p
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      • Profile picture of the author Alan Ashwood
        Originally Posted by Alexa Smith View Post

        This is completely wrong: that isn't how it works at all.

        Your tax-free personal allowance of about £7,500 - or whatever - obviously remains tax-free. If you earn £1,000 more than that, you're liable to pay tax on the £1,000, not on the total of £8,500. According to your "reasoning", you'd actually sometimes be better off earning less - and that would be a bizarre "tax assessment system", wouldn't it?! :rolleyes: :p
        Hi Alexa

        What're you doing here?

        I think this is just a misunderstanding of the terminology.

        You are 'officially' taxable on all your income (£8500 in this case), however -
        There is a threshold of, (in this case) £7500, on which you would not have tax deducted.

        Every penny over that threshold will be liable for tax deductions. The tax rate (normally) starts at 20%, but as your income increases the rate increases on the amount beyond each threshold.

        Basically, what you've said is absolutely correct, just expressed a different way. One day I'll catch you giving out incorrect information - one day. :rolleyes:

        Hope that makes sense.

        I won't even try to comment on US IRS rules, mainly because I know nothing, and I'm very afraid.

        Alan

        PS. Did you miss my thread: http://www.warriorforum.com/main-int...-love-you.html ?
        I know you're not guilty, but it may amuse you. It's all got a bit smutty.

        Oh yes, Good Morning.
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        • Profile picture of the author Alexa Smith
          Banned
          Originally Posted by Alan Ashwood View Post

          Hi Alexa

          What're you doing here?
          Correcting misinformation about UK income tax, I think ... :rolleyes:

          Originally Posted by Alan Ashwood View Post

          I think this is just a misunderstanding of the terminology. You are 'officially' taxable on all your income (£8500 in this case), however - There is a threshold of, (in this case) £7500, on which you would not have tax deducted.
          Indeed ... exactly so: Roley's statement was mistaken. I know that a lot of people do imagine that income taxation does work that way, and that you can actually be better off earning less. It isn't true, of course. Not in any country, as far as I understand: it would make no sense at all, would it? Governments would rightly be ridiculed for it (well, some are anyway, of course, but this is another matter altogether. ).

          Originally Posted by Alan Ashwood View Post

          Did you miss my thread: http://www.warriorforum.com/main-int...-love-you.html ?
          I know you're not guilty, but it may amuse you. It's all got a bit smutty.
          Have not seen it yet, but will look - thanks. You'll look a long way to find anyone here less politically correct than myself, so I wouldn't worry!

          Originally Posted by Alan Ashwood View Post

          Oh yes, Good Morning.
          And good afternoon ...
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          • Profile picture of the author Alan Ashwood
            Originally Posted by Alexa Smith View Post

            Correcting misinformation about UK income tax, I think ... :rolleyes:

            Have not seen it yet, but will look - thanks. You'll look a long way to find anyone here less politically correct than myself, so I wouldn't worry!
            You really shouldn't have tole me that.

            I'm normally paranoid at not upsetting or offending folks, so it limits my so called 'sense of humour'. I don't care what people are saying about me. At least that means they're talking about me.

            Perhaps I shouldn't have said that?

            Alan

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            Time for a cuppa.
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  • Profile picture of the author Jack Coxill
    Go to your local citizens advice bureau usually found in libraries and ask what you need to do, they will tell you everything you need to know, and what actions to take.

    Jack.
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  • Profile picture of the author Alan Ashwood
    Originally Posted by Jenn Michaelson View Post

    Now that you are doing $8K per month you should look into off-shore trusts. I wish I would have done it back when I hit $8K--would have saved me a lot of money!
    1. The OP never said anything about earning £8k PER MONTH;
    2. I don't believe you earn £8k per month either;
    3. Offshore trusts are irrelevant
    4. This is a post count builder
    5. I've reported it;
    6. Don't be surprised if it disappears some time soon.

    Read the WF rules, and stop trolling.
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    Now where did I put that pencil?

    Time for a cuppa.
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