Fiverr Community Forum

Questions about earnings and UK tax/HMRC

I’m wondering if anyone on Fiverr can help answer some questions about how Fiverr profits work in relation to UK taxes and offer some suggestions on what might be the best method of withdrawing my profits.

For some background context, it should go without saying that I’m entirely based in the UK. I’m currently unemployed and on job seekers allowance (JSA), and when I last spoke to them they seemed to suggest that it’s essentially fine for me to keep doing work on Fiverr provided what I earn never amounts to more than my weekly/bi-weekly JSA payments. I’ve had my profile active since December last year but only really started selling services on here in April.

The thing is, as far as I can tell, HMRC has absolutely no idea how much I’ve earned on Fiverr until I withdraw it from my profile. But my worry is, if I pull out all of my profits now, how would HMRC view it? I presume working on Fiverr isn’t classed as self-employment, so I don’t think I’m eligible for the “trading allowance” relief on the first £1,000 of my income.

But the thing is, if I say withdraw all the money I’ve made so far in one lump sum, would HMRC treat that as effectively money I’ve earned just for this month? The amounts I’m talking about certainly don’t come anywhere near to my JSA payments (it’s under £300 over the whole time I’ve been on here), but I know there would be a big difference (well, I think anyway) for tax purposes if it was treated as “all money I earned in July” versus “all money I earned over the last 4 months”.

So what is the best way to do it to make it as easy as possible for tax purposes? Should I be withdrawing it in increments every, say, month or week, below a certain threshold? Or would it not be an issue to just pull it all out in one go? I don’t want to transfer it to Paypal first, as I think if I then transfer to my bank account I’d have to pay Paypal a fee (which I’d rather avoid considering Fiverr already taxes sellers for their services!!!).

It sohuld hopefully go without saying that I’m not going to do anything and then quote someone on here for “advice” if it turns out to be wrong. I just want to get an idea of my options, as I’m sure there must be other UK users on here who have faced similar issues.

edit: just with some additional info, based on some calculations I’ve done I can see that my profits per week/month are drastically different depending on whether I arrange all my sales based on the date the order was placed or the date the money was cleared into my Fiverr account. Based off of this, there are 2 weeks by using the ordered date when I technically earned more than my JSA, versus 4 weeks by using the fund clearance date, which I feel will have a significant impact on how this money is treated by HMRC. Or am I overthinking it entirely?

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I didn’t read further than that. And it looks like you are confusing a lot of things.

And freelancing wether it’s working on fiverr or any other platform or even offline clients is considered self employed.
You don’t get “trading allowance” because you are not a trader.

However you don’t have to pay taxes on your first 12500£. And you pay taxes once a year.

But I would advice you to call an accountant. Most of them have 1 hour free consultation

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Working on Fiverr is classed as self employment.

For specific help with tax matters suggest you contact your local tax office or an accountant.

They will be able to help you.