zarathustra started this topic @ 19:09 on 22/12/2006
If a personal website is making revenue through advertising (e.g. Google adwords, or Amazon), as a sole-trader does any profit made have to go through the business as taxable profit?
Would there be a distinction between a personal website, and a business based website from which the extra bit of revenue was being generated, and if so, is it possible to divide the money made from the personal from that of the business for tax purposes, given that google adwords only allows the creation of one account?
RE: Google Adwords and tax
sparkatrician01 | 23/12/2006 12:58 AM
Hi zarathustra,
As i understand it any money made is liable to (income)tax, whether you're running a business or not so if you work for a company under PAYE and then earn some on the side you should declare it!
Paul
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ELECTRICAL CONCEPTS
Design, Install, Maintenance.
Domestic & Commercial
www.electrical-concepts.co.uk
call 01992 700 825
RE: RE: Google Adwords and tax
zarathustra | 23/12/2006 02:28 PM
Hi Paul,
Thanks for the reply. I'm a sole-trader, but was under the impression that anything that makes money on a personal level (e.g. selling personal items that won't purchased for trade), is okay up to a certain limit - something just over the £4000 mark? Maybe I'm mistake?
RE: RE: Google Adwords and tax
darrenram | 31/12/2006 06:32 PM
From what I understand the £4,000 limit was dropped a few years back and technically everything should be declared in your tax return.
The Inland revenue will advise on this.
RE: RE: Google Adwords and tax
James Smith | 02/01/2007 09:57 AM
The short answer is that is it taxable, the longer question is one of how and where, and whether or not NI is due. Income tax will be due in any case there is no exemption from paying income tax on any part of your untaxed income. This has always been the case and is not as the above poster suggests a new situation. I imagine they are getting confused with the scenario where your total earnings are below the tax threshold, or where there is no NI due as total earnings are below the NI threshold.
To review this, the first issue is whether or not this is part of your sole trade?
It may be that the revenue should be properly reported as part of your sole trade (eg income from a website used for your sole trade), and be subject to NI and income tax on the same basis as that is. If the revenue is (unusually) in a different trade or nto a trade at all then there may be an advantage in declaring this separately from an NI point of view. You will need to discuss with your accountant about "badges of trade" and what category this should come under. If it is under the “other income” category no NI will fall due which is an advantage of up to 11%.
The most likely scenario is that the income would be countered as part of your sole trader income and be subject to income and NI at the normal rates.
As I say discuss with your accountant if you can get hold of them this time of year!
Regards,
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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