1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Need Help - Student in UK Tax Advice

Discussion in 'Business & Tax Advice' started by LukaB, Mar 19, 2012.

  1. LukaB

    LukaB Jr. VIP Jr. VIP Premium Member

    Joined:
    Apr 3, 2010
    Messages:
    3,546
    Likes Received:
    4,248
    Gender:
    Male
    Location:
    Planet Earth
    I am using my brothers Paypal (he is a student in the UK, student visa) and I am using his Paypal, he made it for me, under his name, Paypal country is the UK. My PP account is Business.

    So I am constantly tranfserring money to my brothers Bank account, $xxxx range, I am worried, I have 2 doubts


    1) Can he get in trouble cause I am working with his Paypal, and he is in the UK with a student visa (government / paypal doesn't know I'm working, not my brother).

    2) TAX.. Does he have to pay tax? If so, how much? Is there a way to avoid tax legally (I do not want to take any risks for my brother).


    Thanks

    Luka

    REP will be added.
     
  2. Leith

    Leith Jr. Executive VIP Jr. VIP Premium Member

    Joined:
    Oct 30, 2011
    Messages:
    5,379
    Likes Received:
    8,570
    Luka, I'l try to help with the tax bit. Everyone needs to pay tax, regardless of whether you use a different Paypal account.

    You get a personal allowance in the UK, which is roughly £8000 this year. If you earn more than that in the year, then you pay tax (I think its 20%) on the difference. Avoiding tax legally - I'm not sure. But as far as Im concerned, if you earn over the personal allowance, then you need to pay tax.

    Am I right in believing that you are in the UK as well?
     
    • Thanks Thanks x 1
  3. LukaB

    LukaB Jr. VIP Jr. VIP Premium Member

    Joined:
    Apr 3, 2010
    Messages:
    3,546
    Likes Received:
    4,248
    Gender:
    Male
    Location:
    Planet Earth
    No, I am in Bosnia, not worried about the law here :D it's corrupt :)

    So if a guy comes to the UK, who earns let's say over 8000 pounds per month, he'll have to pay it THE 2ND month (taxes) or it starts from next year?

    Luka
     
  4. loswarrior

    loswarrior Regular Member

    Joined:
    Mar 2, 2011
    Messages:
    395
    Likes Received:
    162
    Location:
    Still Looking!
    Is he in the country more than 183 days? if not, pm me!
     
    • Thanks Thanks x 1
  5. LukaB

    LukaB Jr. VIP Jr. VIP Premium Member

    Joined:
    Apr 3, 2010
    Messages:
    3,546
    Likes Received:
    4,248
    Gender:
    Male
    Location:
    Planet Earth
    He's there 3rd year now.
     
  6. florflor

    florflor Senior Member

    Joined:
    Mar 9, 2008
    Messages:
    822
    Likes Received:
    307
    Yes he is liable for taxes. Doubtful he would get caught though.

    If he did get caught, he'd have to admit it was your money. They might still want tax money from him though.

    There are many internet marketers who don't even realise they have to pay taxes and don't for a few years. After all, it's not like all banks and Paypal tell HMRC about your income. One day it'll probably happen though.

    If you are earning serious money, like thousands, then you really need to set up your own Paypal account and maybe even open a foreign bank account. If you're earning peanuts like 500 quid in a year then just keep quiet, nobody is going to give a shit.
     
    • Thanks Thanks x 1
  7. Leith

    Leith Jr. Executive VIP Jr. VIP Premium Member

    Joined:
    Oct 30, 2011
    Messages:
    5,379
    Likes Received:
    8,570
    Nope, as far as I know you get tax returns. This is most likely at the end of the year.

    So, let's say you make £100,000 in the year, you would pay tax on £100,000-8000. But you are allowed to also remove costs which you used up on resources such as computer bills, electric bills, printing costs and so on.

    But because you are in Bosnia, sending money to someones bank in the UK every now and then, it could create a red flag.

    Can't you just take the money yourself? Rather than sending it to your bro?
     
    • Thanks Thanks x 1
  8. LukaB

    LukaB Jr. VIP Jr. VIP Premium Member

    Joined:
    Apr 3, 2010
    Messages:
    3,546
    Likes Received:
    4,248
    Gender:
    Male
    Location:
    Planet Earth
    I'd have to use my moms name, moms paypal account (have to make) and Bosnia isn't the best for Paypal, so that's a no, still not ready yet for Bosnians.
     
  9. loswarrior

    loswarrior Regular Member

    Joined:
    Mar 2, 2011
    Messages:
    395
    Likes Received:
    162
    Location:
    Still Looking!
    Just sent you a pm Luka.
     
    • Thanks Thanks x 1
  10. LukaB

    LukaB Jr. VIP Jr. VIP Premium Member

    Joined:
    Apr 3, 2010
    Messages:
    3,546
    Likes Received:
    4,248
    Gender:
    Male
    Location:
    Planet Earth
    I don't want to say how much I earn :) but med-high $xxxx , so it might be a red flag.


    How do I pay taxes lol :D gotta do a lot of research.
     
  11. akazzz

    akazzz Regular Member

    Joined:
    Dec 17, 2011
    Messages:
    377
    Likes Received:
    149
    Location:
    Building The Empire
    You have to fill out a tax form and you can include some expenses that you will be able to deduct from your overall tax payments to reduce your tax. Its a huge list and there are lots of "what ifs". Thats why accountants exist :)

    On the other note, for avoiding tax, I'm not knowledgeable enough yet to do that :p

    I am currently studying for an accounting course myself and I know how complicated it is.
     
    • Thanks Thanks x 1
  12. cataratas

    cataratas Junior Member

    Joined:
    Apr 13, 2011
    Messages:
    166
    Likes Received:
    75
    I'm not sure what Paypal do in terms of reporting to/cooperation with HM Revenue and Customs here but to state the obvious it is only income that is taxable (for the purposes of what we are talking about here).

    What you're talking about isn't income if I understand your post correctly. You are just using your brother's Paypal account. As long as your brother can easily prove he is not deriving an income or any financial benefit from you using his Paypal account then it is not a matter for HM Revenue and Customs and more of a matter between Paypal and your brother and you and whether Paypal's terms are being abided with which they won't be!

    The real issue won't be one of tax or taxable income but more one of whether money is being laundered through the account. In the UK now that is a very big deal indeed.
     
  13. LukaB

    LukaB Jr. VIP Jr. VIP Premium Member

    Joined:
    Apr 3, 2010
    Messages:
    3,546
    Likes Received:
    4,248
    Gender:
    Male
    Location:
    Planet Earth
    At the end I believe since I don't want any risks, it's best to pay taxes.
     
  14. Leith

    Leith Jr. Executive VIP Jr. VIP Premium Member

    Joined:
    Oct 30, 2011
    Messages:
    5,379
    Likes Received:
    8,570
    You're better of paying taxes. I've had a friend who thought he was clever and in the end he got fucked, and had a big lump of arrears.

    Why don't you just set one on your parents name? And then change to yours?

    Or maybe check out 2Checkout?
     
  15. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

    Joined:
    Sep 24, 2008
    Messages:
    3,816
    Likes Received:
    13,934
    edit - I really shouldn't be giving tax advice... speak to an accountant!
     
    • Thanks Thanks x 1
    Last edited: Mar 19, 2012
  16. LukaB

    LukaB Jr. VIP Jr. VIP Premium Member

    Joined:
    Apr 3, 2010
    Messages:
    3,546
    Likes Received:
    4,248
    Gender:
    Male
    Location:
    Planet Earth
    NVm bout skype, thanks a lot bro, i was thinking of using 2CO
     
    • Thanks Thanks x 1
    Last edited: Mar 19, 2012
  17. cataratas

    cataratas Junior Member

    Joined:
    Apr 13, 2011
    Messages:
    166
    Likes Received:
    75
    It's not about whether there's any point in filing a return or not. You don't decide that, HMRC do and even if your income is less than 8k a year if HMRC want you to fill out a self assessment you're going to have to-no choice in it meathead, but you know that anyway I think; it's just that your post infers otherwise.

    Just so it's clear...
     
  18. LukaB

    LukaB Jr. VIP Jr. VIP Premium Member

    Joined:
    Apr 3, 2010
    Messages:
    3,546
    Likes Received:
    4,248
    Gender:
    Male
    Location:
    Planet Earth
    I'd like to thank everyone for the help, my decision is to be used in 1-2 months probably, going to use 2checkout, and payoneer as my card so i can withdraw.
     
    • Thanks Thanks x 1
  19. florflor

    florflor Senior Member

    Joined:
    Mar 9, 2008
    Messages:
    822
    Likes Received:
    307
    Payoneer is a good idea, just remember that they need a copy of your passport/ID! Sucks but I only found out after I registered.
     
  20. dotcomdesigns

    dotcomdesigns Power Member

    Joined:
    May 16, 2009
    Messages:
    673
    Likes Received:
    646
    Location:
    UK
    Please be very careful about what you read here. A lot of people make statements purely on guesswork. PayPal have a legal obligation to notify tax authorities when the amount you have received hits a certain threshold. PayPal won't be allowed to operate in this country if they don't agree to HMRC directives. All eBay and PayPal account holders have been known to the HMRC for some time now.

    PayPal contacted me when I hit my figure. It was a while ago, probably 2006. They sent me a notice saying that payments into my account had exceeded £4000 or so, I can't remember the exact figure. It was nothing nasty or scary. Just a bog standard letter. I think they needed some other verification and said something about passing my details to the tax authorities. Sorry to be so vague, it was a long time ago!

    The situation with your brother maybe different as he's not a British national? The HMRC are having a hard enough time chasing down all the Brits at the moment without trying to catch foreign students as well.

    >>>
    There are many internet marketers who don't even realise they have to pay taxes and don't for a few years. After all, it's not like all banks and Paypal tell HMRC about your income. One day it'll probably happen though.
    >>>

    It's statements like this that are very dangerous. No they don't divulge the income, but they let HMRC know. Transaction of £10,000+ also trigger a notice. For example, the HMRC received EVERY single British nationals details that had an account in a British offshore bank account some time ago. They are also paying foreign bank workers to give up British account holders. A Luxembourg bank clerk received a tidy sum for giving up the details of someone very rich in the UK, I forget who it was and the story now.

    I got caught with an offshore account back in 2007. The investigation took 2 years. They went back 10 years into every single account that I had ever had. There are very few safe places to hide money any more apart from under your mattrass!

    Anyway I digress.... pay your taxes and sleep well at night. :)
     
    • Thanks Thanks x 1