Paying tax on website earnings UK
In 2005 i started my first website, it was not that popular back then but i decided to add Google Adsense to it, after a while (May this year) i got my first payment. Being an honest person i contacted the Tax Office to ask them what i need to do in order to pay income tax on this and any future amounts i earn from websites. They asked me when i had received my first payment and why i hadn’t informed them earlier. I explained that i didn’t tell them about it before this year as i have not earned anything from the website until this tax year. They seemed happy with this and asked me the exact date i started my first website, i told them it was November 2005. The man on the phone then explained that as i went out with the intent to making money more than 120 days ago i would be fined £100 and there was nothing he could do about it!
I plan to appeal against this and hopefully i will not have to pay, but it really makes me mad that being honest has landed me with a fine.
The Tax Office have now registered me “Employed” and “Self Employed” so i need to go on a half day free course (arranged by them) showing me how to fill in a tax return, which i will need to fill in each year whilst earning from my websites. I will also get a tax bill every April for the previous tax years tax and if i earn more than £4000 in a year i will have to pay additional National Insurance of £2.20 a month via direct debit.
So if you are in this position and you’re considering contacting the tax office, beware, you might just end up with a fine!
UPDATE 1:
I have received a National Insurance bill for £220 pounds today, i called the tax office and they are sending me an form to fill in so i don’t have to pay it due to my earnings being below £4000 pa. They did say that it is unlikely that i will have to pay the £100 fine due to the small amounts of money involved too. Fingers Crossed.
UPDATE 2:
I have just received 2 forms to fill in (both the same) CF10, this is to declare that i earn less than £4635 from your self employment so do not have to pay extra National Insurance. This form was easy to fill in, nothing taxing (heheheh) and hopefully will also mean i do not have to pay the £100 fine for not declaring it earlier.
