Google Adsense and UK Tax authorities


D

David Off

I'm currently making a reasonable amount of money from Google adsense.
In case you don't know adsense is a content targetted advertising
program run by Google. Google place ads on your website, people click
on them and you earn cash for clicks.

Anyway I figured I'd better declare it to the IR. I assume that just
like any business I can deduct expenses such as Internet, Web hosting
and expenses related with generating the content.

Has anyone given this any thought or already declared their Adsense
earnings on their self-assessment?
 
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D

Dave T

David said:
Anyway I figured I'd better declare it to the IR.
I don't know anything specific about Adsense, but this is untaxed income
so it should be declared to the IR one way or another.

The Revenue may consider this a 'business'/'self-employment', so you
should call Self Employment Services (number is on their website) and
tell them what you're up to.

With the above, you should claim tax relief on expenses incurred wholly
and exclusively for the benefit of your 'business'. You're unlikely to
get away with much other than perhaps a (small) proportion of your
website hosting costs.

Any profit since 6 April 2004 does not have to be declared until your
2004/05 tax return (which you'll start receiving if you register your
'business'), the tax then payable by 31 January 2006.

Hope this is of some help.

Dave T
 
R

Ronald Raygun

Dave said:
I don't know anything specific about Adsense, but this is untaxed income
so it should be declared to the IR one way or another.

The Revenue may consider this a 'business'/'self-employment', so you
should call Self Employment Services (number is on their website) and
tell them what you're up to.
I hardly think this counts as a full-blown business. It may as well
go in the section for miscellaneous income not declared elsewhere,
assuming the amounts involved are not enough to raise eyebrows.
With the above, you should claim tax relief on expenses incurred wholly
and exclusively for the benefit of your 'business'. You're unlikely to
get away with much other than perhaps a (small) proportion of your
website hosting costs.
Agreed. If it's basically a personal website, then virtually all
the expenses were incurred for a private purpose, not business.

If it's a business website, on the other hand, all the expenses
would count against the income of whatever business it was for,
and then the extra advertising income should simply be put through
the books of that business.
 
J

Jonathan Bryce

Dave said:
With the above, you should claim tax relief on expenses incurred wholly
and exclusively for the benefit of your 'business'. You're unlikely to
get away with much other than perhaps a (small) proportion of your
website hosting costs.
Why not the whole website costs? Without the website, you wouldn't have any
visitors, and you wouldn't have any income from the adverts.
 
P

Peter Saxton

Why not the whole website costs? Without the website, you wouldn't have any
visitors, and you wouldn't have any income from the adverts.
That's not the point. You should split the costs between the personal
use and the business use. I dont know how to split it either! The
principle is to determine why the web site was made.
 
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D

Dave T

Ronald said:
I hardly think this counts as a full-blown business. It may as well
go in the section for miscellaneous income not declared elsewhere,
assuming the amounts involved are not enough to raise eyebrows.
I agree that it is not really a business by most definitions, but the
Revenue may see it as such for tax/NIC purposes, particularly as it is
ongoing.

There are penalties for not registering a (Revenue definition of a)
business of any size (and either paying Class 2 NICs or applying for a
small earnings exception certificate), so I would suggest that just
assuming it can go into 'miscellaneous income' may be risky, without
agreeing it with the Revenue first, even if it is a tiny amount.
 

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