Personal Finance & Money Asked by Diuoo on May 6, 2021
I live in UK and only pay taxes here. Every year I need to submit my self assessment but until now I only had my regular job, so all taxes were paid at source and I simply had to report this in the self assessment.
Starting this year I have opened a website where I have a private area that people can access if they pay a monthly subscription. So essentially I am selling a service online and I would like to understand how is this activity taxed?
I still have my regular job so I will still report my income in the self assessment but I was wondering if the additional income I get through the website subscriptions will need to be added to my regular income (and taxed accordingly) or if they can be classified and taxed differently.
I am not a tax accountant, so you might want to get some professional advice, but as far as I know it [edit: the level of faff and bureaucracy involved, not the tax rate] depends quite a lot on whether you make more or less than £1000 / year from this.
There is a £1000 allowance for "Trading Income" where if you make under that amount from self-employment or casual work in a year you don't have to declare it, however this only applies if you're not already doing Self Assessment so in your case it would still need to be declared. The good news is that you can also claim expenses relating to the trading.
If you do make more than £1000 - and specifically as it is from a subscription service rather than from casual work like babysitting or whatever - you would need to set yourself up as a sole trader and declare it as self-employment income on your Self Assessment. More info here.
In either case it's then taxed in exactly the same way / same bands etc as any other income.
Answered by Vicky on May 6, 2021
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