Originally posted by Gros
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Reply to: Game earnings via business account?
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Previously on "Game earnings via business account?"
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Originally posted by Sally BFCA View PostCorrect, the 40% tax is only for any earnings over the £43875 threshold (£37,400 lower tax band + £6,475 personal allowances)
So, the money I take out of paypal will push me over the basic wage level. How will that affect things?
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Originally posted by lje View PostHowever, 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...
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Originally posted by Gros View PostWhen you talk about playing 20%, is this on all my earnings from the game, or just 20% over a certain figure?
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...
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If you start putting the income through your company, you will either need to invoice or provide receipts detailing money received and the breakdown of VAT as you are going to have to work out the VAT element of what you receive. You may need to adjust your percentage rate if you are on the VAT flat rate scheme for a different trade classification.
Previous income prior to having a paypal account should be treated as personal income, as that is what is was then.
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Originally posted by Stag Cozier View PostIf your personal income is incidental to your company income, then its fine to declare it as other income on your personal return if you are a basic rate tax payer. It actually works out cheaper (20% income tax vs 21% CT).
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I would be inclined to sell the IP of the game to the company.
I'm not sure if this would come under capital gains (hopefully - you can use you tax free allowance) or incidental income.
Then carry on as you suggest with the company continuing to benefit from the advertising income (you will need to re-work everything to be in the company name).
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Originally posted by Gros View PostYes but that's what I want to avoid.
As Zed said, you could treat what you have done thus far as personal and anything else moving forward as company?
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In that case maybe treat what you have earned so far as personal income. Then slap your company name on the software, set up a paypal account in your company's name and treat subsequent income as the company's.
ZED.
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Originally posted by chef View PostAswell as asking on here for general advice, this seems more of a question for your accountant surely?
Originally posted by zedAccounts View PostIs the game a company asset? Did you write the game for the company? Is the Paypal account in the company's name?
Originally posted by Stag Cozier View PostSay this game thing wasn't the same business activity as your limited company's, you could simply declare the profit on your personal tax return and pay the associated tax on it as it would be considered other income.
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Say this game thing wasn't the same business activity as your limited company's, you could simply declare the profit on your personal tax return and pay the associated tax on it as it would be considered other income.
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Is the game a company asset? Did you write the game for the company? Is the Paypal account in the company's name?
ZED.
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Aswell as asking on here for general advice, this seems more of a question for your accountant surely?
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Game earnings via business account?
Hi all.
Usually I'm doing IT contracts and accounting via a limited company, as most of you here. Recently things have been bad and I haven't secured contracts, so have been focusing on new things.
I released a free game onto the mobile market, which thankfully has done rather well, and I'm making money via advertising. The money gets paid to me from the Ad company into my Paypal account once a month.
1) Is it acceptable to class this as business earnings? It's the same business that I set up my company for, and it's money I've earned from my own efforts.
My hope is that I can pay this money into my business bank and account for it there, so that I can pay myself dividends from it, and the taxman gets his share via corp tax. The alternative would be declaring it as personal income, and paying tax that way.
2) If the answer is Yes, how do I do this, regarding VAT? I'm VAT registered, but this money has no VAT involved. I don't bill them, they just pay me a flat sum every month.
Any advice greatly appreciated!Tags: None
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