UK Do you pay tax on uncashed out income?


Joined
Jan 31, 2019
Messages
1
Reaction score
0
Country
gb
Hello everyone,

I am working on a mobile app, which I hope will generate a side income beside my work.
The app's revenue will be held by the ad company that runs the ads on my app, so I won't have access to the money unless I cash it out.

So my question is am I correct to assume that the money isn't mine until I cash it out (it becomes in my possession)

If I wait till the next tax year or even the year after for it to build up, do I still need to declare it? Even though the money isn't really in my bank account and I can't really spend it.
 

bklynboy

VIP Member
Joined
Oct 12, 2011
Messages
536
Reaction score
96
Country
us
Not necessarily and its hard to say without knowing a whole lot more (type of filing, business, LLC, LP, Sole, etc) and the exact terms of the contract. best to quickly consult a Tax attorney or CPA so you can know going in what the consequences are and if possible structure the arrangement to get the best tax position for you. Whether the money is in your account or not is not the necessary trigger - what matters if its considered paid to you or not.

My own two cents is when revenue is generated someone needs to pay the tax - if not by you then by the ad agency and seems strange to me that ad agency owes the tax when you have the legal claim to that asset.
 
Ad

Advertisements

Fidget

VIP Member
Joined
Jan 6, 2013
Messages
531
Reaction score
82
Country
gb
NIce try, Mocas, but HMRC are all over that one! It is basically treated as income (and therefore taxable) at the point in time you become entitled to it. So it doesn't matter whether or not you've 'cashed out'.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top