Affiliate Marketing - Self Employed?

prodigy1989

Hi

I have a blog at the moment where I make a little bit of money through affiliate links using Affiliate Window. We're talking about £50-100 a month.

I am currently registered as a business and pay the correct taxes etc.

However, I am thinking of ending the self employment because I spend such little time on the blog. Having said that, the blog will continue to run and the affiliate links will still be included.

I intend on changing the settings on Affiliate Window so that I don't get paid until I choose. Therefore, I will not be receiving any income for my blog. All the income will be going onto Affiliate Window. It will not be touching any of my bank accounts.

Am I able to end the business as long as the money stays in Affiliate Window and I don't withdraw it?

If, in about a years time, I decide to withdraw the money - I would then register as a business again and fully declare the money which I withdraw, and pay the correct taxes.


Thanks all :-)

antrobus

prodigy1989 wrote: »

Hi

I have a blog at the moment where I make a little bit of money through affiliate links using Affiliate Window. We're talking about £50-100 a month.

I am currently registered as a business and pay the correct taxes etc.

However, I am thinking of ending the self employment because I spend such little time on the blog. Having said that, the blog will continue to run and the affiliate links will still be included....

A business remains a business, irrespective of how much time you spend working on that business. Many people who engage in such an online business activity do so precisely because they hope to make some money with doing much at all.:)

prodigy1989 wrote: »

...I intend on changing the settings on Affiliate Window so that I don't get paid until I choose. Therefore, I will not be receiving any income for my blog. All the income will be going onto Affiliate Window. It will not be touching any of my bank accounts.

Am I able to end the business as long as the money stays in Affiliate Window and I don't withdraw it?....

No.

prodigy1989 wrote: »

....If, in about a years time, I decide to withdraw the money - I would then register as a business again and fully declare the money which I withdraw, and pay the correct taxes.........

You could elect for the cash basis for accounting, which would achieve much the same end. If you did, then I don't think there are any anti-avoidance measures that would negate such a manipulation.

looknohands

I've sold business items and been paid into a PayPal account and it will never touch my bank accounts but I declare it to HMRC. It's cash you've earned at that moment in time, nothing to do with bank accounts, cash in hand never touches my bank account but I'd still declare it.

Also think about it you'll have earned the money this tax year but what you're suggesting means you can pay tax on it in a later tax year, maybe when you don't earn as much so you avoid tax, or at a time when you'll benefit from changes to tax allowances for which the income shouldn't apply to.

To me sounds like you definitely need to declare it still, but I'm not an accountant.

Mistral001

What the Op is proposing is tax evasion. Whether the OP wants to hide the money in a high street bank account or in some little-know online account, it does not matter. It is what you put on your tax form that counts and not where the money is. It might be little easier for the tax authorities to find undeclared income in a high street bank account, but that is debateable.

prodigy1989

Thanks for the replies.

I'm not deliberately trying to evade tax, I'm just trying to think of how I can free up a little more time on my part.

I also spoke to an account who said that it should be declared regardless of where it is held, so that is what I will do.

lowndsy

Hi folks. I have been active in affiliate marketing since '99. and worked on the agency, network and publisher sides, including the payment side of things when I handled the payment runs for a large UK network. Sorry to disagree with some of the previous posts, but I have some knowledge of the industry that puts a different spin on things.

Earning money and not paying tax on it or hiding it is of course naughty, but with affiliate marketing it can be an option because of how most of the industry accounts for commissions and your account balance.

Networks work with thousands of people, making £billions of sales and paying £millions in commission. If the networks were to hold and account for all that money on behalf of every single affiliate like a bank they would have to be registered with so many authorities and jump through so many hoops that they would find it very hard to operate. Most of them have a cunning way round it - your balance isn't actually considered to be "money" until you withdraw it. Behind the scenes, until you are paid your balance is more like clubcard points.

Simply put, your affiliate activity earns you commissions, or the promise of money, but the action which converts it to money is when you click the button that says "yes, please pay me", or if they have your account details saved, when they do their weekly or monthly payment run.

So you are usually okay to keep the "money" in your affiliate account, as long as you take care of the tax when you actually receive the cash. The networks are pretty hands off when it comes to tax and leave that up to you, but they do provide some basic guidance and all the necessary VAT numbers you may need. As you would expect the more money is involved, the more they will support you. Don't expect much help if your balance is for twenty quid.

Generally speaking though, even if the taxman won't care it is not a good idea to leave commissions in your account too long.
Every network reserves the right to empty your account or not pay you without giving you a reason. The good ones wouldn't do that lightly, but if you are found or even suspected to have broken the rules of the programme then any balance in your account is easy for them to claim back. This does happen regularly, and then of course you have the dodgy operations who might just keep your money because they can.
That won't be a problem with Affiliate Window, but even then withdrawing your balance often is good practice and more importantly from my point of view helps motivate you to make more next time, growing the industry.

Hope that makes sense,
Steve