Selling a Website Design

[Ben-BSH]

if im honest, even if i was going to be paid £1, £100, or more, i would want to make it legal, im just that kinda guy, i always ensure i correct people if they give me too much change etc, always have lived that way, and its what makes me happy

 

i am going to make a phone call to the Taxman today, to explain what is happening, and explain it is very erratic and not definite income, therefore what should i do, get it from the horses mouth as such.

 

see, its a very hard one, because this may just be a bit of fun, and odd jobs for people on the side of work, but i am still offering website design via my site, even though i know its not going to get much traffic, if any at all. but it could all take off, which i hope it does, i would love to get into digital art further down the line. i was just hoping mr taxman would make it as easy as possible for me to be a good boy!

[ICT_GUY]

Quick points,

You must register as a sole trader within 3 months of starting a business.

There are standard terms and conditions all over the webs that will cover this. The long and short is to get them to sign off on the project, that is it is finished and bought as is. If they want it modified, then you can charge extra to do so.

[Ben-BSH]

Quick points,

You must register as a sole trader within 3 months of starting a business.

There are standard terms and conditions all over the webs that will cover this. The long and short is to get them to sign off on the project, that is it is finished and bought as is. If they want it modified, then you can charge extra to do so.

 

so, even if i only sell one site this entire year? i still need to be a sole trader?

[Guest theeldergeek]

All I am saying is that 100 quid declaration to the taxman is laughable

 

Says who?

 

From http://news.bbc.co.uk/1/hi/business/7326911.stm

 

"The published HMRC performance report shows that the average cost of collection is just over 1p for every pound of tax recovered, which represents a very good "return" on the money spent."

 

So it doesn't actually cost the taxman that much to retrieve tax on income.

 

There are of course loopholes and/or legitimate reasons why paying tax could be avoided on this supplementary income, but this obviously needs to be done through the correct channels and not via stuffing £100 in your back pocket and saying nothing.

Edited May 26, 2010 by theeldergeek

[Guest theeldergeek]

so, even if i only sell one site this entire year? i still need to be a sole trader?

 

Yep, if you are going to do it properly, as you seem to want to do. I thought this had been covered in a previous thread?? This is a good place for you to start... HM Revenue & Customs:

Edited May 26, 2010 by theeldergeek

[Ben-BSH]

well, after speaking to the nice lady at the tax office, it appears, yes, registering as self employed is a good idea, but not one i am going to do just yet, for now, she said i could, should i want to, phone the tax office, every-time i have been paid for a site, and then get them to add the amount to my tax code. which means i pay it off monthly, which seems very good, but i am a little concerned that at the end of the year, they will assume i am going to earn the same next year, and perhaps this is something i need to look into, is how easily can my tax code be "reset"

 

This sound like something i should consider? or should i just grab my man parts and jump in as a sole trader

[Guest theeldergeek]

Citation needed.

 

Is one really needed? Her Majesty's Revenue and Customs is responsible for collecting tax, on whatever scale. There is even a dedicated web site and helpline to report tax evasion... HM Revenue & Customs: Reporting Tax Evasion

 

Added to that, this article BBC NEWS | Business | The fight against tax evasion details how HMRC increased tax revenues in recent years. The article is a couple of years old admittedly, but I doubt policy has changed much in that time. Indeed, with the current focus on the economy being what it is, I would suggest HMRC will be looking to increase tax revenue in the coming years.

[Guest theeldergeek]

well, after speaking to the nice lady at the tax office, it appears, yes, registering as self employed is a good idea, but not one i am going to do just yet, for now, she said i could, should i want to, phone the tax office, every-time i have been paid for a site, and then get them to add the amount to my tax code. which means i pay it off monthly, which seems very good, but i am a little concerned that at the end of the year, they will assume i am going to earn the same next year, and perhaps this is something i need to look into, is how easily can my tax code be "reset"

 

This sound like something i should consider? or should i just grab my man parts and jump in as a sole trader

 

Your tax affairs will be no more complicated as a Sole Trader than they are as PAYE. If anything, as a Sole Trader, you can make life very easy by keeping everything nice and separate, submitting a tax return with all sorts of claimable expenses on it, and, with a clever accountant, actually end up paying LESS tax!

 

Having said that, if you want to make sure you only pay tax on income, get an accountant involved. If you are happy to charge £100 knowing you actually spent £5 on the telephone calls, £10 on the electricity used whilst designing the site on your computer and another £10 heating the room you use, then simply submit a basic tax return and absorb the expenses in your fee.

[Ben-BSH]

Awesome! then that is what i shall do.

 

Thanks all, you have all helped so much!

[ICT_GUY]

What he said, but you won't have to pay tax as long as you buy stuff for the business. Hence why I have 2 x 24inch monitors, a new pc, lots of camera equipment ect ect ect. Keep receipts, keep paperwork, buy stuff with your allowances. There are a load of deductions you can make, inc maintaining an office at home.

[Guest theeldergeek]

What he said, but you won't have to pay tax as long as you buy stuff for the business. Hence why I have 2 x 24inch monitors, a new pc, lots of camera equipment ect ect ect. Keep receipts, keep paperwork, buy stuff with your allowances. There are a load of deductions you can make, inc maintaining an office at home.

 

Buying "stuff" for the business doesn't automatically equal paying no tax. What it does mean, is you can offset any business expenses against tax that you do owe. Things like heating, lighting, electricity and phone are all tax deductible, as are any assets you buy for the business (computers, FAX machine etc). Using your home as an office also brings allowances, but you need to be very careful about this because you can then sometimes be had for business rates, so only ever declare one room as your office (an accountant would be better placed to advise you on this though).

 

Like I said before, you can keep it simple and just pay tax on what you earn, absorbing any business costs in your earnings, or you can claim for a myriad of allowances and tax deductibles.