Fiverr Community Forum

Arrested for not paying Fiver Tax

Your Fiverr Experience
#1

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 :slight_smile:

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:

  1. Research the tax laws/rules for freelancing in your country
  2. Check if you need to set up a legal company to process your earnings through
  3. 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.
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#2

I did try to research the forum but didn’t find much beyond this Do you file taxes for Fiverr?

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#3

Thanks for posting this topic. There might be a lot of sellers who have not considered that they need to pay taxes. The consequences of not paying certainly makes it worth thinking about. :thinking:

I have set up a sole proprietorship here in Denmark. I pay my taxes through that! :slight_smile:

These are good links to start if you want to register a company in Denmark (though I doubt there are other Danish people here):


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#4

Haha at the clickbait title.

A serious post tho, one about building an actual legal business entity, yet so few views or comments, what a shame the “why me no make sell” and “why my gig no sell” posts drown out any real business logistical conversations.

I’ve not seen 2.5 “How do I pay income tax on my Fiverr revenue” posts, let alone the 25 a day of the other topics…

Only found this post by searching the forums for “Ltd Company” and “Limited Company”.

Those in the UK can have a Limited Company setup for free with the “tide” banking app. They do Director’s addresses and offer mail forwarding too through a partner. I like keeping addresses etc as private as possible.

I’ll be going Limited before I start trading, that’s after loaning the company the few grand setup costs I have. Decided on 1 single £1 share and the setup expenses filed on my Director’s account so I’ll be able to recoup my funds.

Makes more sense to lend the company money, than it does to buy shares in the company with the same cash, that way I get the money back without tax headaches, whereas the shares option would only let my get my cash back as a dividend I’d have to pay tax on.

Had a bookkeeper, accountant and solicitor all aboard on my last company, this time I’m going solo and whilst I’d love to claw back the VAT element on my setup, I don’t want the bother of then having to file every quarter.

You can get your VAT returns sorted out by fellow Fiverr users: would you though, really? Would rather use someone local rather than virtual.

I know there’s a lot of non-UK users here but thought this type of discourse would have come up on more people’s radars and gotten more input.

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