Do you pay tax on SMALL EARNINGS from self employment in the UK? (YouTube, Ebay, Etsy etc.)
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- Опубліковано 3 жов 2018
- As a small business owner who also does UA-cam one of the most common things I get asked is whether you have to pay tax on UA-cam earnings and also small income from the likes of eBay, Etsy and the like? In this video I'm going to hopefully answer that question! This is specifically for the UK for the 2017/2018 tax year but if you're in a different part of the world it would be interesting to hear things are done where you're from! For more small business and self employment tips don't forget to Like, Share & Subscribe! :-)
Read the full article here: smallbusinesstoolbox.uk/small...
Here's the HMRC guidance for tax free allowances on trading and property income:
www.gov.uk/guidance/tax-free-...
Also an excellent article here on Accountancy Age that discusses these allowances in more detail:
www.accountancyage.com/2017/1...
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Nice one mate. I have made around £500 this year on YT and was dreading the Tax payment. Perfect. Thanks again. Have a like!
So I have just sat and watched this as I’m looking to go self employed and it’s given a great insight in understanding how tax works. Thank you
Thank you so much for these videos! You explain in a way that makes total sense.
No worries!
Another great job well done, agree totally with your own personal view of just how confusing and unnecessarily confusing HMRC love to make things for all of us. Accounting terminology for business seems to be sadly lacking these days , it's really fantastic to be able to watch you in action having the guts to say what everyone with brain cells is thinking!
Excellent video to guide new and growing You Tubers, many thanks.
This is really interesting as I never knew about the reading losses til I saw your video
awesome video i have been looking for this answer for a long time as im fully employed but also earn around 700 - 1000 quid a month in adsence, hope i can offset my expensive camera gear against my tax
No worries! Yes, you should be able to lower your adsense profits by off-setting all associated costs. If it's existing gear it may be more tricky - speak to an accountant. For new purchases you should be fine though. Best of luck! 👍👊
@@SmallBusinessToolbox thanks pal
Thank you so much for the tax implications from UA-cam revenue in layman's terms
Cheers mate that was helpful. will give them a ring during the week. My one is under 1000.
No worries - best of luck! (HMRC will be busy in Jan) 👍
@@SmallBusinessToolbox apparently up to 1000 is still the same... In most cases you don't have to do anything.
Great videos, has helped me understand more about becoming self employed and will be watching more.
This is probably a stupid question. is the tax free allowances on what you get from self employment effected from employment income?
It doesn't impact the £1000 trading allowance but it does impact your overall personal allowance (currently £12,500). 👍
love your videos. i automatically getting taxed from my employed job as i earn more than than the tax free threshold . im investing £500+ a month using employed wages growing my ebay buisness with stock, but i havnt lost nothing on my ebay self employed as i reinvest that too so i wouldnt get tax back as ive not lost money? all self employed profits go straight back in the buisness
What a legend
Bit of a strange one - I know this video is old, so I'm hoping you're still around answering comments! I am a complete start-up, only been in 'business' on eBay for two months and am obviously under the £1k limit. I haven't registered with HMRC as a small-business yet. Do I need to do that now, or do I wait until I have made over £1k? If I register now, do I pay any fees? Do I have to prove what I have made so far? It's all new to me!
Hi! There's no fees to register with HMRC - personally I would leave it until you're making over £1000. It's worth keeping records anyway but you'll not need to do anything with them until you register and are asked to file a tax return. Best of luck!
really helpful, thank you
i guess I'm kind of off topic but does anybody know of a good place to stream new tv shows online?
@Xavier Graysen I would suggest flixzone. Just search on google for it :)
@@xaviergraysen1298 Netflix, Amazon, UA-cam. If you’re talking about free illegal streaming then I can’t help you.
Please do a video on dropshippers ... sales tax vat .. income tax etc
You look a lot like the Gosforth Handyman! :-)
He's quite good :D :D :D
Ha ha thank you Jon! 👍😂
Hello this is really helpful, in regards to reselling is the personal trading allowance taking after £1000 in profit is made or is it from the total amount made before expenses such as fees and postage costs? Thank you
It's gross income (turnover) not profit, so defo something you need to consider. 👍
Hiya! I have a question for ya. During 2018/2019 I have been employed from April to July. No additional income. Then I quit the job and started/ registered as self-employed without any other employment. However, I have made very little profit- below 1k. I have not taken any benefits or allowances. Everything I have brought/ used was paid by my money saved over the years on the normal account so I was not making anything on interest. I'm an EU citizen so I have registered straight away so I can pay voluntary NI as it probably will help with settled status for which I'm planning to apply by the end of this month. My question is whether/how I do declare the employment at the beginning of tax year if self-employment and employment were done in separate times? thanks
I'd suggest having a quick chat with an accountant as you want to get everything right for the settled status thing, but the employment and self employment is just different sections of the same tax return. You can have multiple employments and self employments and you just add additional sections and include the figures from your P60. Cutting it fine for the 2018/19 tax year mind - the deadline is 31st Jan. Best of luck! 👍
Heya, love your clear and informative videos. I am completely new to all of this and find it all quite confusing. My maths pretty dire so working it all out is very scary.
I started on Etsy mid April last year. My 'revenue' as they call it on Etsy by my 1 year shop anniversary was just under 1k. Just checking on my stats now, from 6th April this year to today, I've made just over 1k total (my profit I imagine will only a small amount - I really need to get the numbers worked out!) ... so, I'm guessing I need to register now?
I am employed as well, however it's very low hours - Usually less than 5-6k income a year.
I also do meet the YT min payout cap on another channel over 2-3 months, usually around £60-80.. Would this be considered like a separate self employed business thing?
Good question! I don't use Etsy myself. Is that £1k paid to you from Etsy? If so then yes, I would say you've hit the threshold to register. Is the YT thing linked in any way with what you do on Etsy? If not then technically that should probably be a separate self employed business BUT if the income is very low I'm sure HMRC wouldn't care if you bundled that with your Etsy income for now. As long as it's getting accounted for. As usual, check with an accountant etc etc. 👍
@@SmallBusinessToolbox Thank you, hmm that's an interesting point as i'm not sure if that figure on Etsy is with their fees taken out or not. But would that matter even So?
@@SmallBusinessToolbox I thought you didn't have to pay any tax if your overall earnings (from all sources) are less than 12K a year, is that not correct?
Heeya Andy, I'm filling in my first (proper) tax return for 19/20 and I'm a bit unsure about something, I thought you may be able to advise - My Etsy earning were around £1600, but with the £1000 trading allowance, could/should I put my passive income I've been getting from a few difference places (youtube, etc..) in there? They are nothing to do with the Etsy business but are like miscellaneous other income across a couple different platforms.
Yes you need to put everything
Great video calmed my nerves abit haha.
Quick question. I've earned $682(£450ish) since March 2019 to now.
Have a full time job so I'm good to not declare right unless I earn over £1k before April? great video again.
Cheers Harry! Yup, sounds correct to me. Obviously always check with an accountant etc etc. 👍😀
If the UA-cam account is a child’s account and the money goes into their account, do they have to pay tax?
You have to be over 18 for an AdSense account so there's a reasonable chance HMRC will view the income as part of the parents' income. Either way, yes - children still have to pay tax if they earn over their personal allowance. No NI under 16 though. 👍
Im struggling to understand. Do you have to be registered as sole trader/ self imployed at under a thousand or only over
I'm slightly confused. I'm a new twitch affiliate. Does that mean unless I earn £1000+ by April 2020 I don't need to do anything? I did look up on gov but I find it all so confusing and I won't be earning enough to get a tax professional involved. I stream off Twitch as a hobby.
By my understanding yes, that's correct - but you should always verify these things either with HMRC or a tax professional.
HI, i know this video is old but do i need to register with HMRC and get a UTR number if i'm earning under £1000 per year ? Can i invoice a company for design work without a UTR ? Any help would be appreciated.
Very interesting. Would have been good if you could have explained the ifs and buts if you earn over 1K income
Don't quite understand - if you earn over £1k you just do a tax return as normal (see other vids). 👍
@@SmallBusinessToolbox I'm new to this so it might just be me being thick, but I thought you could either choose to use the 1k allowance, or use your expenses instead. I'll check out some of your other vids! Cheers
If you earn over £1k you have to do a tax return no matter what (regardless of expenses). 👍
Hi Mr Gosforth, I've been following your other videos for some years and only now I've seen this.
Hope you're still around to answer this.
If I'm opening an UA-cam channel, twitch account now, but I'm employed on a 50k salary. I'll need to invest in camera, computer, and even games for streaming.
In the beginning there will be no analytics data to show I'll ever make a profit.
Can I put all those expenses against my employment salary? Also, some of them would probably be considered part business part personal leisure. How does that work?
Hi Douglas - yes and no. What you're referring to is sideways loss relief and you can't do this on Cash Basis. You can potentially do it if you're on accruals accounting but you'd need to speak to your accountant as the rules are more complex. I'll pre-warn - building a gaming channel these days is very hard. If you got audited it would be a hard sell to convince HMRC that your purchases were for business use. Realistically it could be years before you could even monetise the channel. I would suggest doing it as a hobby at first and seeing how you get on. Bank on creating 1,000+ videos before making a penny. Sorry it's not better news! 👍
Small Business Toolbox I appreciate your honest answer. That's exactly the kind of answer I needed. Thank you very much for your time. I'm very grateful.
I do a lot of travel vlogs. Can I go back over the years and ring up HMRC with the travel expenses and create a trading loss?
Hmm... I'm not sure if you've already submitted the returns if you can alter them. You'd also have to seriously prove that the business is or will make a profit or you might trigger a full audit, which is never nice. I'd speak to an accountant if you're talking a significant amount. 👍
Your tax-free Personal Allowance
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.
This is from Gov Website. Just confirming you don’t pay tax on earnings below?
if you put the £18.5k back into the buisness (buying stock) and it becomes expense do you still have to pay tax? and is it corporation tax for limited company's?
What you're talking about here is sideways loss relief - offsetting the profits of one income against the losses of another. Yes, it can be done but not if you're on Cash Basis - defo get help from an accountant here. Corporation tax for limited companies (totally different to this). 👍
If my bank account is in the UK with a british bank(Lloyds) , and I have a permanent resident status in the UK, and my income is from my website, youtube channel and from selling ebooks; BUT i dont live in the UK(to avoid expensive living expenses like housing, food etc.)... where do I pay taxes? Do I even need to pay taxes?
There's complex rules on residency for tax purposes - article here that might help europa.eu/youreurope/citizens/work/taxes/income-taxes-abroad/index_en.htm
Very much doubt there would be a situation where you wouldn't pay any tax.
Are website registration, setup, hosting and admin fees for a Sole Trader acceptible deductible expenses/business losses in the UK, anyone? It seems to me they're as much of an essential tool as a carpenter buying a saw or a hammer.
So if I buy a car for £4500 and sold it on Ebay for £5000 (this is my only transaction I made in this tax year) I don't have to declare it because I only made £500 profit witch is only half of £1000 annual tax free allowance. Do I understand it right?
1:02 Did you wait almost a year to release this video? you say 12/2017 but UA-cam date is 10/2018
So as an NHS paramedic.. I could work an agency shift here and there up to 1k a year and basically walk away with the cash tax free and not even have to set up a business/do tax returns?
Would the agency work be on a self employed basis? If so, probably... but double check with an accountant. 👍
Will do, ty very much.
Guess HMRC don't want to have to deal with the admin of a business that they are going to get next to no tax from because they make a very small profit margin. I started doing a bit of PAT testing last year as a side line, only made about £700, but I was going to start advertising my services this year, so I could creep over the £1000 so if I stay under a £1000 are they saying don't even bother telling us your that your out there, we don't want to bother with the paper work ?
Basically yes, that's my understanding. If you're making under £1000 they don't care. 👍
Love
👊👍
Watching 2020
So they realised people where paying less tax by making a loss on side hustle start-up so they thought if we tell them they have a trading allowance they don't have to pay tax on they will pay full tax on there main income
I am from India.. I would like to link my website through which I plan to sell my own books , my upcoming UA-cam channel to my Indian NRE bank account. Should I still pay tax in UK because I reside here if I make any money at all???
This is quite a complex subject but more info here: www.gov.uk/tax-foreign-income/residence
Really great video. Thanks. As far as I could see on my tax return when they ask about turnover being over 1k , if you click no, it didn't even give me the option to type my expenses in later in the return. And when I printed it off, after I'd finished, it just said I was not self employed. I called HMRC and the chap I spoke to said that's correct , even when I asked about expenses he said that I wouldn't need to declare as my turnover was under 1k. I'm going to have a look over my return again and double check. It doesnt seem right to me that you cant record down your expenses!! How are you meant to offset if they have no record of it!! Would positive think it would be a great thing if you could do a video on doing a tax return if someone had no PAYE and had started a small business with a turnover of under 1k but with expenses. I'd like to see what results you'd get on this please??! Thanks.
If you want to carry losses forward personally I just wouldn't tick the box for
@@SmallBusinessToolbox it probably would be their intention tbh, but they'll say its swings and roundabouts as if you have the trading allowance you're not paying the tax on that, the trouble is that expenses could well be over what you would have been charged in tax but saved by the trading allowance. I'm a part qualified accounting technician and yet I can see a flaw in the tailor section of the return. It should give you multiple options on how you want to produce your tax return rather than a one box fits and assumes all!! They give an option of a survey so I may need to see if I can note it in there! Would still be interested to see what a video of yours would produce results wise based on this though 🤪😁😜 .
I just monetize my channel. I am so excited
Can you make a video about registering as self employed in Gibraltar ???
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pointless for tax to go after such a low limit. turnover of 1000, so you might make 250 net profit.
taxing peoples tiny 250 net profit venture, in case they actually get started in small business.
what will the taxman make off that 250, maybe £50.
which may be enough for the bureaucracy involved to pay for itself.
stamping out any spark of entrepreneurship in society.
i bet morgz owes inland revenue millions in taxes but he doesn't report a single penny