Web based business

SilverUK

Hi,

I run multiple websites online that earn money through advertising accounts, such as adsense.

My question is, at the moment I'm registered as self employed and have a tax sheet of income/expenses for everything. Should this be split up for each website as some sort of business?

Or would there be a way to say have one business but split it into each website?

The overall income has never been too large but as it's progressing now I think I need to re-evaluate how I'm doing things and be certain it's being done the best way.

Thanks

Mistral001

I assume that you have not formed a ltd company

You are considering each website as a business entity. They are as far as you are concerned. But as far as business transactions go you are the business. You will be responsible for all financial dealings of the business.

HMRC will see this in the same way. It is the profit you make from your business activities that they will be interested in. You will be paying personal income tax. The businesses will not be paying any tax (unless you need to register for VAT).

Working out this profit is what you have to do for yourself or get an accountant to do it for you. For internal accounting purposes you might think it a good idea to break everything down according to each site, but there is no requirement for you to do that as far as I can see.

SilverUK

Thanks, that's great.

Are there any benefits of forming a ltd company and doing it that way instead of self employed?

InsideInsurance

If you are earning enough then there can be tax advantages for using an Ltd, especially if you have spouse etc who isnt a higher rate tax payer/ doesnt hold large share volumes already and is able to provide at least some support to the business. HMRC does try to reduce the opportunities for tax savings and different accountants will give you different advice on how far to push it.

The main difference is if you have an Ltd the company is a legal entity in its own right separate to you and therefore has its own property, liabilities etc. This separates out these things from you as a individual where as as a sole trader you and the business are one and the same thing. So, if your business got a unsecured loan and the Ltd went bust then you personally dont have to pay it but if you had done it as a sole trader you would. That said, as a director of a Ltd you can be asked to give personal guarantees on behalf of your Ltd and also be liable if you're negligent in your duties so it isn't a 100% failsafe way of doing things wrong and getting away with it.

pitkin2020

Mistral has summed it up. I run two very different business and all of the accounting is done individually but come tax return time they are just combined to form one single tax return. It makes no difference to anyone hows it calculated and you could work it as a whole or individually depending on your circumstances.