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UK Tax Laws - Google Adsense Affiliate Programs
UK TAX LAWS - Websites, Bloggers, Affiliate Programs, Advertising, Selling Online.
You have to declare yourself as self employed if you are making websites on the internet and using them for making money through advertising or in any other way. If you are already in employment and work for a company then you will still have to register yourself - Your status will then become "Employed and Self Employed". You must do this regardless of how much money you are earning through your blogs.
Therefore this means that you do pay Income tax on earnings coming through google adsense or any other affiliate program - E.g. Ebay, Amazon. And you do have to declare your earnings. Therefore it is important to keep accounts of your earnings, and receipts of relevance once you start blogging. Some people get an accountant to look after the tax side of things, but you need to see if it will be worth your while, as earnings are not always high through affiliate programs.
If you have no other form of Income and work self employed as a blogger only, then you will not pay tax on any earnings below £5,000 profit. If you earn above then you will need to fill out a self assessment form in April to review how much tax you should pay.
If you are "employed and self employed" and you already earn over £5,000 in your employed job, then you will be required to pay tax on any earnings made from affiliate programs. However if you earn less than £5000 on your employed work, then you will only start paying income tax on what you earn that goes above £5000 altogether.
You should contact HM Revenue & Customs to make them aware immediately of any self employed work that you are doing on the internet. They will send you a self employment pack and can offer you a half day workshop, where you can learn how to fill in a self assessment form.
Class 2 Contributions (National Insurance Contributions)
If self employed then you will also have to pay to Class 2 contributions. These count towards:
- Incapacity benefit / Employment and Support Allowance
- Basic State Pension
- Bereavement Benefits
- Maternity Allowance
If you are over 16 and you are self employed then you must pay a weekly contribution to class 2. Currently this contribution is £2.40 per week. However there are some exceptions:
- You are a pensioner - Over 65 for a man, and 60 for a woman.
- You have applied for and been successful for a certificate of small earnings exception, which means are exempt from paying Class 2 tax for the year.
If you are Employed and Self Employed, then you should only pay Class 2 Contributions once you self employment is earning over £4,825 from April to April. If you expect to earn below this amount then you should apply for exemption from class 2 tax. You can phone HM Revenue & Customs and they will send you an application form to make yourself exempt.