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Full time internet marketer, in need of tax advice for the UK please...

Discussion in 'Business & Tax Advice' started by Jack Torrance, Jan 9, 2016.

  1. Jack Torrance

    Jack Torrance Power Member

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    I'm registered full time with internet marketing at the moment. Wondering if any of you could help with tax.

    The largest bulk of my income is from Google AdSense, but I also get smaller sums from international checks (Amazon and Clickbank).

    I'm planning to claim all of my business expenses (proxies, web hosting, Aweber and SERPBook monthly, plus one off payments such as payments for themes, internet marketing programs, domain names etc.) against my tax. I assume these are all 100% tax-deductible? I am keeping all of the PayPal receipts in a seperate folder on my inbox for when the time comes. I would claim internet but the broadband bill isn't in my name (not sure if that makes a difference).

    Please let me know everything I need to know to pay as little tax as possible :)

    P.S. I saw some advice in another thread about opening a company but not sure about all the ins-and-outs of how that works or even how I go about paying myself a wage. I mean do I just basically empty all profits from the business into my own account and claim that was my pay? Lol.
     
    Last edited: Jan 9, 2016
  2. LaurusK

    LaurusK Newbie

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    Hi Jack,

    I assume you are a U.K resident?
     
  3. Jack Torrance

    Jack Torrance Power Member

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    Yep...

    I'm registered self-employed right now. I've been registered since the end quarter of 2015... Apparently I need to file a self assessment by the end of January but I haven't been working self-employed for a full year so I don't know wtf my year's salary would be? Lol. I'm so f*cked I don't know anything about taxes.
     
  4. password01

    password01 Regular Member

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    Lol, then you need an accountant or head on over to www.ukbusinessforums.co.uk where you can get more business/tax related advice.

    Well, the tax year in the UK is from April to April. Meaning when you registered for self employment you were in the tax year 2015/2016, which ends in April 2016.

    The January deadline you heard about is for the previous tax year which was 2014/2015 which ended in April. i.e. You don't need to file a return until January 31st 2017.

    All your expenses are allowable against tax but you can only claim against the lower rate of tax. For example, if you have a receipt for £100 then that is a tax credit of £20.

    Most business expenses are allowable but there are various rules. I think most of the expenses you mentioned wil fall into the above rule. Again, see an accountant if unsure.

    Your broadband is kind of complicated if it's also used for personal use, I think there is a rule where you can only claim a portion of it. Also, why isn't it in your name? House share or spouse? Be careful here as you can only claim against the amount you put towards the bill. It not being in your name shouldn't be a huge problem, as this will only be an issue if you are audited. It should still be ok, but you will need to check it out (Accountant).

    Regarding a company. I'm pretty sure you can't do anything to reduce tax on money already earned in a personal capacity. You can set on up going forward to reduce future tax liabilities. If setting up a company, while not legally required, you would be absolutely INSANE not to hire an accountant. These generally run anywhere from between £50 - £100 per month and will set up your company and file
    Beware though, a company comes with it's own expenses so you must be earning enough to make it worthwhile. I read on the UK Business Forum that the sensible figure could be as low as £30k per annum. You will need to double check this.

    A company is a great way to reduce tax as you can take some money out as a "Dividend" which is taxed differently (lower) than personal income tax.

    Also, A word of advice. Email probably isn't the best place to be keeping your receipts. I have a folder on dropbox where I keep all my receipts and also an excel file recording all expenses etc. You should also keep excel files recording all income and be able to create reports for the tax year.

    An accountant may advise you to get some kind of accounting software but I don't really think that is required if you can use Excel.

    Hope that helps.
     
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  5. praetserge

    praetserge Power Member

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    I lived in the UK and ran a company there.
    1. It's easy to offset all your expenses if you have a company but not sure if you're self employed.
    2. You pay less tax if you run a company as it's less than 20% (I was paying 20% but they are lowering tax now).
    3. Unlike other countries, you don't need audited accounts if you run a small business in the UK.
    4. As for paying taxes and NI, I used http://www.listentotaxman.com/ to make sure I pay NO tax or NI for myself (as I don't want all that extra hassle), the website basically shows how much you can pay yourself without any taxes.
    5. To set up a company in the UK, it's only about 30 quid and you can put all the business expenses on the business and it's easy.
     
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  6. Jack Torrance

    Jack Torrance Power Member

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    Whatever would I do without this forum?
     
  7. RuthSam

    RuthSam Jr. VIP Jr. VIP Premium Member

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    ask an accountant!
     
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  8. password01

    password01 Regular Member

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    For sure. And in my opinion an accountant is a requirement once your numbers hit a certain point.. i'm pretty sure the advice they will offer up along with peace of mind will make it a self paying activity.