about tax in UK

Discussion in 'Accounting and Taxes' started by mzonas, Dec 7, 2009.

  1. mzonas

    mzonas
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    Hi. I am owner of a browser based game Hero Town. I receive payments via Paypal. Users purchase credits and V.I.Ps via Paypal. Currently it does not earn more than £100 a week but I believe that it will start earning me more than that.

    Since I am getting payments via Paypal and my Paypal account is premiere so it deducts a percentage from anything I get. Do I need to pay tax when I earn via Paypal? What paper work do I need to do so I could have everything in legit way?

    Thanks in advance.
     
  2. keshavn73

    keshavn73
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  3. Fergal

    Fergal
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    Welcome to Business Advice Forum mzonas and thanks for asking your business questions. I'm glad to hear that your browser based game is going so well for you and that you expect continued growth, congratulations with that.

    You should find the business section of the HM Revenue & Customs website particularly useful. That page contains links to useful guides a leaflets, such as the Are You Thinking of Working for Yourself leaflet.

    You could even consider telephoning HM Revenue & Customs and asking them some of the registration questions you have. When you make the call you can give them as much or as little information as you feel appropriate.

    Do you have an Accountant or perhaps one of your friends or family has an Accountant that you could have an initial consultation with. The first consultation will probably not cost you anything and could give you a good outline as to what you need to do to in relation to tax. Having a good accountant can actually save you time and money, as they advise you on the best way to approach your tax affairs and minimise tax payments.

    You might also find the Business Link, Starting Up in Business page useful. You will see that they have a drop down list to help you find the nearest Business Link location in your area. Business Link is a free service and it would be well worth getting in touch with them and having a chat about ways that they might be able to help or advise you.

    http://www.nfea.com/ is a website that provides links to enterprise support agencies throughout the UK. You will notice that they have a Find Local Business Support section towards the bottom right of their home page. Well worth a look to see if there are other enterprise support agencies in your area that can give you advice and details on the legal requirements for your business.

    We have some members from the UK and perhaps some of them may post with their personal experience or knowledge in this area. Please post back with your thoughts and let us know if there is anything else we can help with.
     
  4. seanstevens

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    Hi mzonas. Fergal has given you some good advice and links.

    You will need to make sure that you take a look at the HMRC website on allowable earnings before tax kicks in. If you go above the threashold then you will be required to pay tax (depending on your age, other work etc.)

    You can also talk to the CAB (Citizens advice bureau), there should be one in your town as they can give free impartial advice. You should also be able to talk directly to one of the HMRC tax advisers, if you do, try not to give too much away about yourself to them immediately. Best to start off by saying you are thinking about doing this rather than you are doing this already.. it saves any deeper questions if they think you may need to pay some tax to them.

    At £100 per week you should be under the normal tax limits (again it depends on your other work, status etc) but if it does start to get higher then you will quickly be over the limits so you have made the right decision to think about it now.

    You may want to think about starting up as a small business, if you do, then a sole trader status is all you need at the current time. It is a lot less hassle than being a limited company and a lot less paperwork.
     

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