Apologies for the Clickbait title (again) but this has been in the back of my mind for a while. No, I wasn’t arrested and I doubt you will be either, but not paying tax is illegal and I’ve seen little posted on the fun subject (apart from some info re US W9 forms).
So, I know that I will need to pay tax on my Fiver earnings in the UK.
Are you aware that you will (almost certainly) have to declare your fiver earnings and pay tax on them? This is called Income Tax. Not paying can result in fines, interest and maybe more.
I fear there could be a tax ‘iceberg’ on the horizon for a lot of sellers. Are you aware of this? No one talks about tax here, we are all happy to chat about the fiver 20% fee though
Some countries have minimum requirements for taxation, so you have to earn over 10K for example before tax applies. Regardless all countries have some rules around taxation.
So, I would suggest you consider this:
- Research the tax laws/rules for freelancing in your country
- Check if you need to set up a legal company to process your earnings through
- Save some money. If you’ve got to pay a tax bill you’ll need it!
So, have you prepared for tax? Do you care? Do you have any good (true) tax knowledge or links for your country you can share?
This is for the UK:
- You can set up a Ltd company for £12 (I recall)
- You can set up a free business bank account in the UK with most banks. (I use Starling)
- The fees for late or incorrect taxes are surprisingly high.
- The HMRC (tax man) can ask you to ‘prove your income’, they can also decide how much you owe them and it is on you to prove otherwise.