Game earnings via business account?

[lje]

When you talk about playing 20%, is this on all my earnings from the game, or just 20% over a certain figure?

This would be exra income for you so you need to take account of the money you get in from your company too. So, for example, if you get a salary of £7k from your company and a dividend of £30k (gross) then you have £37k coming in so earnings from the game up to the higher tax limit (around £43,000) would be taxed at the basic rate of 20% - ie up to around £6k.

However, if you have more money coming in from your company (salary and dividends over £43k) then you would have to pay 40% on your incidental earnings.

That's my understanding of things anyway - but I'm not an expert in this area...

[Sally BFCA]

However, if you have more money coming in from your company (salary and dividends over £43k) then you would have to pay 40% on your incidental earnings.

That's my understanding of things anyway - but I'm not an expert in this area...

Correct, the 40% tax is only for any earnings over the £43875 threshold (£37,400 lower tax band + £6,475 personal allowances)

[Gros]

Correct, the 40% tax is only for any earnings over the £43875 threshold (£37,400 lower tax band + £6,475 personal allowances)

Haha... the chance would be a fine thing! I pay myself minimum £450ish a month salary, and no dividends for a year now.

So, the money I take out of paypal will push me over the basic wage level. How will that affect things?

[Sally BFCA]

Haha... the chance would be a fine thing! I pay myself minimum £450ish a month salary, and no dividends for a year now.

So, the money I take out of paypal will push me over the basic wage level. How will that affect things?

Any earnings over £6475 (may become £10000 in the June budget) will be taxable at 20% if it stays as personal income or no further tax to pay if paid into company and paid out as a dividend. There will be a tax credit of 10% for all dividends raised.