Tax on donations?

vb3d

I am thinking of starting a service that will be totally free, but also asking users if they want to support me through donation button.
Would I be expected to pay tax on what ever I get as donations?

SailorSam

If anyone gives you a donation isn't that income ?

booksurr

vb3d wrote: »

Would I be expected to pay tax on what ever I get as donations?

in what way are you a registered charity? Thought not.

vb3d

I thought income is money you get for exchange of "service"
I am not a registered charity.

What about people who stream on twitch as an example, lots of them get donations
Take an example this twich channel
http://www.twitch.tv/tsm_doublelift
He got a donate button, should he pay tax on what ever he gets?

le_loup

Of course.

antrobus

vb3d wrote: »

...Would I be expected to pay tax on what ever I get as donations?

No. A donation is a gift. Gifts are not subject to income tax in the UK.

agrinnall

antrobus wrote: »

No. A donation is a gift. Gifts are not subject to income tax in the UK.

But it could be argued that the donation is made in return for whatever the "service" is that the OP will be offering. I think for it to be regarded as a gift it would have to be very clear that there is no link whatsoever between the donation and the service.

vb3d

Any clearer than:
1 - Service can be used for free
2 - No fixed amount of money to give, it is up to donator
3 - No obligation on the service provider(no contract)

booksurr

vb3d wrote: »

Any clearer than:
1 - Service can be used for free
2 - No fixed amount of money to give, it is up to donator
3 - No obligation on the service provider(no contract)

1. you are offering a service, you are not a charity asking for gifts
2. irrelevant (PS. the word is donor)
3. you are the service provider and the lack of a contract between you and the donor is, anyway, irrelevant

with respect, there is a huge difference between begging resulting in you receiving monetary (or other) gifts in return which is, as stated above, non taxable (there is indeed no gift tax in the UK);

or, as in your case,

the very overt linking of the passing of money over to you as a direct consequence of you providing a service where use of that service is a deliberate choice of the user. The user will not be giving you money were it not for your service. Agreed the user has a further choice that in so doing they can either pay or not pay for that service, but if they pay, you have earned from providing that service and therefore it is your taxable income.

there are many software business who offer freeware and provide a donate button. Do you seriously think that money is tax free?

booksurr

antrobus wrote: »

No. A donation is a gift. Gifts are not subject to income tax in the UK.

wrong context - OP is offering a service not begging for gifts

SailorSam

The same question was asked and the answers all agree unless you're a charity or 'registered' as non-ptofit making, you'll have to pay tax.

http://askville.amazon.com/donations-website-pay-taxes/AnswerViewer.do?requestId=56830388