Self-employment and surveys

asajj

HMRC gives conflicted advice on vouchers, not on cash payments (i.e. cheque, Paypal, BACS transfers). They are taxable income. You aren't working for them, you are self-employed and you take up the work as you wish, you set up your own hours etc.

Once you register as self-employed, this won't mean you will pay tax though. This is however, entirely a different issue.

Flyonthewall

ElefantEd wrote: »

Of course there's a contract. When you click on the link that says "Answer these questions for £1", that's the contract. Theoretically if they don't pay you, you could sue them. The fact that your work might be rejected and you don't get paid - which could also happen with other freelance work deemed not of sufficient quality, or that they might not pay you even when you've done it properly is neither here nor there. Nor does something saying that this isn't employment in their terms and conditions have any particular weight legally (I am sure they are in effect just making you a zero hours contract freelancer, and just covering themselves to make sure you don't try and claim for holiday pay, sick pay, redundancy etc). Though of course the fact that there are terms and conditions suggest that there is a contract!

Or are you saying that if I pop next door and my neighbour says "I'll give you £20 if you put up these shelves for me" that that isn't taxable income, because there is even less of a contract between us than between me and a survey site? I might not get paid if I put them up badly, or if they haven't any money, and I might find the debt difficult to enforce. But if I do get paid, then I've earned the money in exchange for my time and effort. No different to doing a survey online, apart from needing a drill and some screws instead of a computer.

It's not a job offer though or any kind of work contract, it's an offer as part of a rewards scheme/programme which is an entirely different thing.

The T&Cs of a website are, I believe, legally binding in the US (and a lot of the sites are US sites). In the UK I think they're seen as legally binding unless a court rules something as unfair, but stating someone is not an employee when signing up to a site with a reward scheme to do an odd task for a few quid is highly unlikely to be seen as unfair.

As for the shelves, you're offering a verbal contract for work. A verbal contract is no less of a contract - harder to prove, perhaps, but still a contract. You're not running a reward scheme/programme, it's cash in hand for a job that you've stated.

There are things you can do online that are classed as working and which any income is taxable. The only thing that's a grey area are reward sites.

ElefantEd

And if my neighbour says, "This isn't a contract, it's just a reward scheme", that would make it not taxable income? Don't think so, somehow. There's no difference between the two situations, online or offline.

Whilst the T&Cs are (probably) legally enforceable, that doesn't mean that they override other legislation. To use an analogy, even if my neighbour includes in the contract "go and take the shelves from IKEA without paying" that wouldn't stop me being prosecuted for theft.

Flyonthewall

ElefantEd wrote: »

And if my neighbour says, "This isn't a contract, it's just a reward scheme", that would make it not taxable income? Don't think so, somehow. There's no difference between the two situations, online or offline.

No one knows, hence the whole reason it's a grey area!

There's a massive difference between a reward scheme and work. If it were so clear and obvious it would be mentioned on the HMRC site and people phoning up enquiring about it wouldn't get conflicting answers.

Whilst the T&Cs are (probably) legally enforceable, that doesn't mean that they override other legislation. To use an analogy, even if my neighbour includes in the contract "go and take the shelves from IKEA without paying" that wouldn't stop me being prosecuted for theft.

What other legislation would apply in this case that would override it?

Stealing property is completely different to getting a reward and not knowing whether to declare it. One is stated very clearly in law that it is illegal, the other is not mentioned.

The T&Cs of reward sites say that you are responsible for paying any possible tax that may be payable in your country. So no site is telling you act illegally.

ElefantEd

Well, you are legally obliged to pay taxes on your income.

Maybe I'm not understanding what you mean by reward scheme?

I am talking about a clear cut situation where you do a survey and get £1, or do a Crowdflower task and get $.01 ie there is a direct correlation between what you do and what you get back - just like any other form of work.

Flyonthewall

ElefantEd wrote: »

Well, you are legally obliged to pay taxes on your income.

True, but there's nothing either way to say that reward sites are classed as taxable income.

Maybe I'm not understanding what you mean by reward scheme?

I am talking about a clear cut situation where you do a survey and get £1, or do a Crowdflower task and get $.01 ie there is a direct correlation between what you do and what you get back - just like any other form of work.

Some reward sites you gain cash per offer, others points so it's not as straightforward as that.

When you complete a job you are paid for that job. Reward schemes don't do that. You have to cashout or redeem your points, whether for vouchers, items or cash (upon reaching a set amount).

The rewards/payments are an incentive to use the site or bonus for using the site rather than paying for a job that needs doing.

Some offers are paid offers. Now when you get cashback for buying or store points they are not taxable, HMRC do make that clear. Paid offers work in a similar way, you pay out and get something back. So for them at least it seems they'd fall under not taxable.

Other offers fall in the middle. There's financial gain, but as part of a programme that involves offers and cashing out/redeeming and not a job which is direct payment for what you've done.

Until HMRC make a decision on reward sites and give a clear answer regarding them specifically there isn't a right or wrong answer on it.

ElefantEd

Well, I remain unconvinced. Using that reasoning, my workplace could just give me 'points' for showing up to work, then at the end of the month I redeem them for cash.. Bingo! No tax!

I suspect the only reason that HMRC haven't specified a clear policy is that the amounts involved are too small to waste time on (and that hardly anyone earning in this way would earn enough to pay tax anyway), or that it hasn't been brought to the attention of anyone at a high enough level to give an official answer.

It seems to me that cashback is rather different - it's conditional upon you purchasing something and is thus rather more like a discount. Similarly the paid offers, though if you get back more than you pay out, that could raise an interesting issue!

Flyonthewall

ElefantEd wrote: »

Well, I remain unconvinced. Using that reasoning, my workplace could just give me 'points' for showing up to work, then at the end of the month I redeem them for cash.. Bingo! No tax!

I'd imagine (due to the payment amounts, that the work needs doing and it being regular payments, plus for employment no choice over if you do something or what you do) that doing that would be seen as tax avoidance.

Plus these sites are all getting money from advertisers and passing a percentage on for completing offers. It's not how most jobs work. So the whole system is different.

I suspect the only reason that HMRC haven't specified a clear policy is that the amounts involved are too small to waste time on (and that hardly anyone earning in this way would earn enough to pay tax anyway), or that it hasn't been brought to the attention of anyone at a high enough level to give an official answer.

It seems to me that cashback is rather different - it's conditional upon you purchasing something and is thus rather more like a discount. Similarly the paid offers, though if you get back more than you pay out, that could raise an interesting issue!

Indeed. The amount it would cost HMRC for the work involved probably wouldn't be worth it as most probably wouldn't be paying any tax.

I've had more money back than what I've paid out via a cashback site and possibly a paid offer. Doesn't happen often and it's the companies choice. I don't see that as an issue whether it's a cashback site or a paid offer. Similar to a shop offer where they say "buy this and we'll give you this free." The free item has a value so you've gained extra from the purchase, but I wouldn't ever see that as taxable.

I know with the cashback/paid offer you'd get all the money back, plus a little extra and the service/item you paid for too so you're gaining more, but in both cases you gain. Neither are considered guaranteed though (run out of free items/cashback or offer doesn't track) and both require you to pay out in the first place. It's a one off offer, it's not like you could ever do that constantly to gain an actual income from it.

asajj

There are people on this forum like Katykicker who earns thousands in cash from survey sites and they were told by HMRC that they would be taxable. Sounds very clear to me.

You are mixing apples and pears. Cashback and vouchers are not part of this. We are talking about cash payments and they are taxable whether you believe it or not.

HMRC probably doesn't waste time on it yes but in Germany or USA nowadays you have to provide your tax number for such websites. You never know HMRC won't do the same.

At the end of the day, it is up to the individual how to deal with their tax affairs. I wouldn't specifically encouraging them not to declare.

Flyonthewall

asajj wrote: »

There are people on this forum like Katykicker who earns thousands in cash from survey sites and they were told by HMRC that they would be taxable. Sounds very clear to me.

Not many make anywhere near close to the same as Katykicker. If I remember right from posts of hers I've read, some of her earnings are certainly from things that are taxable. Her website, if it makes her money, for example, would be taxable. She doesn't make all her money just from survey sites.

So it's not as simple as she makes loads from surveys and has been told it's taxable. Others have contacted HMRC about survey earnings and be been told it's not taxable. You can't claim everyone should be taxed and it's clear just because one person uses survey sites as one way to earn and is taxed on all their earnings.

You are mixing apples and pears. Cashback and vouchers are not part of this. We are talking about cash payments and they are taxable whether you believe it or not.

Ok, so if, for example, I use a survey site and cashout £5 in Amazon vouchers. Doesn't count because it's a voucher right? But I cashout £5 to Paypal from the same site it's suddenly taxable just because it's cash?

If it's earnt the same way and of the same value why is the outcome different?

Not everything involving cash payments is taxable. You can see that just by looking at the .gov site!

Unless you can provide official proof, written for all to see, you cannot state that cash payments from survey sites are taxable.

Also, reward sites can include cashback offers/sections so it does need to be mentioned that cashback is not taxable and OP asked about vouchers. So no, we're not just talking about cash payments.

HMRC probably doesn't waste time on it yes but in Germany or USA nowadays you have to provide your tax number for such websites. You never know HMRC won't do the same.

At the end of the day, it is up to the individual how to deal with their tax affairs. I wouldn't specifically encouraging them not to declare.

If HMRC do decide to the same then it should all become clear and then there'd be no need for any discussion.

Who has encouraged someone not to declare it?

I certainly haven't. I simply stated it's a grey area which it is, for reasons already stated. I've even made a point of saying that some ways of earning online certainly are taxable.

There hasn't been any encouraging either way, just a discussion about differences between the reward sites and a job and what the .gov site/HMRC says (or doesn't say) about taxable income.