Accountant Advice For Bloggers
I just had the opportunity to ask an accountant a few questions about running a blog as a business. Thank you to Shaz Nawaz from aa accountants for answering my questions!
What counts as an income when you are blogging or own a website in the UK? (Advertisements, payments, affiliates, sponsored posts, gifts, free products, free experiences, free events, etc.) Do you have to declare any and all money that is received as part of this?
Pretty much everything counts as income. A gift which is received is not income as the person giving the gift has to pay the tax. If the gift has the donor’s logo and is less than £50 then it is not a taxable benefit in kind. Free events aren’t income as you’re a guest attendee. A party is taxable if you are a guest and again the donor usually pays the tax benefit charge on this – it would be rather disappointing and annoying if you had to pay tax on a party invitation as it would lose its appeal! Anything associated with money or a tangible money benefit is taxable.
Are you allowed to make money from your blog or website when you are on maternity leave? Are the rules different if you are receiving Statutory Maternity Pay or Maternity Allowance?
You are allowed to make money while on Maternity leave. Your employer will pay you SMP. Any additional income will be taxed accordingly depending on your total income
What do many bloggers and small business owners do wrong when it comes to paying their taxes?
- They fail to register their business within the first 3 months of trading. There is a common myth that you don’t need to register your business with HMRC in the first year of trading. If you don’t register within 3 months then you’ll end up with a £100 fine. This will increase the longer you delay.
- People fail to save the tax – they end up using it for other things in the business. Late payment of tax attracts penalties plus interest
- People fail to keep proper records – they don’t keep all the original receipts. You must keep these as evidence.
- Late filing of tax return – they end up missing the 31 January deadline.
- Incomplete or incorrect completion of tax return – without proper advice people end up completing their own return. What this means is that they end up missing out on certain tax allowances – therefore paying too much tax. Or they miss off items (income or expenditure) therefore ending up filing an incorrect tax return. There are penalties for filing an incorrect tax return. This is usually picked up when HMRC conduct a tax enquiry into a taxpayer’s affairs.
Is your blog your business? Do you find it difficult to know what to do?