.Any financial advice regarding possible Kickstarter project?

Jj13

(not sure if this is the right place to post this, sorry!)

So, I haven't done a tonne of research as of yet, however I had a couple of questions regarding the website Kickstarter (as I can't find any information anywhere!). I have a project in mind that I would like to start gaining funds for through Kickstarter (a bit of an insight to Kickstarter haha: I set a target amount of money I would like to raise within a certain timeframe and if people want to, they donate x amount. At the end of the timeframe if I have reached the target, I get paid the full amount- minus 8% to Kickstarter- into my bank account).

Okay, so my questions are;

1) Would I need to register as self employed? without giving too much away, my project would involving working with a few of my friends on a photography project and at the end (of said 'project') we may decide to sell prints of the work, or try to exhibit the work, maybe even create a book (as I say, early days yet haha).
2) Would I need to declare the money (the amount that would be put into my bank account)?
3) If I were to use the money to pay friends for their time on the project (don't know a better way to put that), what would I have to do regarding this? Just transfer the money into their bank account, or again, would I have to declare this?

This project is only for a bit of fun, but because there's money involved, obviously I want to make sure everything's legit haha

John_Gray

Jj13 wrote: »

At the end of the timeframe if I have reached the target, I get paid the full amount- minus 5% to Kickstarter- into my bank account).

Err... At least 8% is deducted...
https://www.kickstarter.com/help/fees?country=GB

Jj13

Sorry! Typo! I'll change it now

agrinnall

I can't answer your questions but I would be quite surprised to find anybody interested in investing in a project that appears to have little prospect of making enough money for investors to get a return. Perhaps there's more to it than you've let on but your description makes it sound like you want people to give you money so you and your pals can play round taking photos.

Jj13

@agrinnall Sorry for being vague. I'm protecting my privacy (if I was to tell you what my project is based/themed on, you could easily find out who I am haha).

Here is a quote from the Kickstarter website telling you what the website is about:
"Kickstarter is a funding platform for creative projects. Everything from films, games, and music to art, design, and technology. Kickstarter is full of ambitious, innovative, and imaginative projects that are brought to life through the direct support of people like you! Since our launch on April 28, 2009, over $2 billion has been pledged by more than 10 million people, funding more than 100,000 creative projects. Feel free to dive into our stats page for more!"

My project would benefit a number of people- so please be assured that I don't "want people to give me money so me and my pals can play round taking photos."

Chino

Jj13 wrote: »

2) Would I need to declare the money (the amount that would be put into my bank account)?

This post suggests that the answer to your question 2 is "yes":
http://www.chrisjonesblog.com/2013/06/are-you-breaking-the-law-by-running-a-crowdfunding-campaign-and-not-declaring-your-income.html

debitcardmayhem

Jj13 wrote: »

@agrinnall Sorry for being vague. I'm protecting my privacy (if I was to tell you what my project is based/themed on, you could easily find out who I am haha).

Here is a quote from the Kickstarter website telling you what the website is about:
"Kickstarter is a funding platform for creative projects. Everything from films, games, and music to art, design, and technology. Kickstarter is full of ambitious, innovative, and imaginative projects that are brought to life through the direct support of people like you! Since our launch on April 28, 2009, over $2 billion has been pledged by more than 10 million people, funding more than 100,000 creative projects. Feel free to dive into our stats page for more!"

My project would benefit a number of people- so please be assured that I don't "want people to give me money so me and my pals can play round taking photos."

but you said

So, I haven't done a tonne of research as of yet, however I had a couple of questions regarding the website Kickstarter (as I can't find any information anywhere!).

oh and

This project is only for a bit of fun, but because there's money involved, obviously I want to make sure everything's legit haha

I'm out .......

Fightsback

I believe the name of this site is Money Saving Experts and not Money Taking Experts.

DavidP24

First off you form a limited company, that way you are insulated from liability, you own the shares in the company.

The company is an entity, so it does not affect your tax liability unless it pays you money. Best not to take a salary but pay yourself in dividends on profits as a shareholder. This means you only pay tax and not NI for you both as an employee and employer.

You do not say how much you want to raise but most important thing is return on investment, even if you were famous and everyone wanted your prints you have to show you can manage costs.

Making a profit in business is as much about controlling your spending as charging a lot.

Why would someone buy your prints over anyone else's prints?

Why would they buy them anyway?

What risk are you taking?

8% is HUGE, I would look for an Angel on an investment forum, they will put you through the mill on the viability of your project which would be a good experience for you.

Does not sound as if you know what you are doing, maybe PM me if you want to provide more info and get a more informed reply.

Good Luck!

DavidP24

Chino wrote: »

This post suggests that the answer to your question 2 is "yes":
http://www.chrisjonesblog.com/2013/06/are-you-breaking-the-law-by-running-a-crowdfunding-campaign-and-not-declaring-your-income.html

That is Bull Sheeet.

The money is investment capital, as I suggested it makes sense to isolate it into a limited company but even if paid to self for a business, it is the profit that must be declared. So if OP raises £10k, buys a load of cameras, rents a studio, hire a photographer, makes prints, creates a website to sell them or puts them on Amazon and ebay, up to that point it is all costs.

If they then sell £2000 worth, they have made an £8k loss and have no tax to pay, there has been no gain.

Paying the money into a company as share capital which can then be used in the business is best way to go. Shares can be allocated between OP and other owners, company makes all those costs and suffers all those losses or makes a huge profit. Accountant works it all out, if a profit is made the board agree to make a dividend payment to shareholders and they each get a cut. Only then is there a gain and a tax liability but you can earn £5k in dividends a year and after that there are tax allowances.