Tax on Youtube earnings

Popz

Hi guys

I'm hoping someone more knowledgeable will be able to help me.

I'm a basic rate tax payer working full time whilst my wife doesn't work.

Recently i opened a YouTube channel which seems to be doing pretty well in terms of earnings through Google Adsense.

I still haven't withdrawn any money from my Adsense account. If and when i do withdraw it i would have to register as self employed and declare it through a self assessment? Is this correct.

I had an idea of utilising my wife's tax free yearly allowance by moving the name on the Adsense account to her. The earnings would be comfortably under the allowance which should in theory result in no tax?

Also does it matter whose bank account the money goes into mine or my wife's? The reason i ask is the process of changing bank account details with Adsense is quite laborious and i'm worried it might affect the good standing with Adsense.

I hope someone can advise please.

Thank you

TheCyclingProgrammer

You have already earned the money and are therefore liable to tax on your earnings so far, regardless of whether or not you’ve transferred the money to a bank account.

IMO there’s a possibility that HMRC could challenge any attempt to divert your earnings to your wife as a settlement under settlement legislation but the chances of this are probably low.

00ec25

as above, you are taxed on the fact you earned income, not the fact the cash is sitting in the adsense account and not yet in your own bank account. The money in the adsense account is immediately available to be withdrawn, so you have already "earned" it and thus are taxable on it. the fact you have not withdrawn it to a different account is irrelevant.

leaving a trail of changing the adsense account over to the wife and then receiving the cash withdrawal into a bank account in your own name would be a red flag that the income is still yours, not your wife's and so as mentioned above settlements legislation may be used to show that your banking and accounting affairs were arranged only to avoid tax, not because they represent the actuality of who was entitled to the income

Mr_Costcutter

Just a thought, but could you make your wife 'a partner' in your YouTube business to help matters?

00ec25

Mr_Costcutter wrote: »

Just a thought, but could you make your wife 'a partner' in your YouTube business to help matters?

that would be administratively counter productive since a partnership would then be formed and a 2 person partnership must submit 3 tax returns. One for each partner, and one for the partnership as an entity in its own right.

much simpler just to transfer the whole business to the wife and let her take the income in her own name. Once in her account it then does not matter who or what she spends it on.