Tax from Crowdfunding - kickstarter

Justina88 · 3 March 2019 at 3:49PM

Hi, Everyone!

I have recently started a campaign on Kickstarter. Kickstarter is a crowdfunding platform where people help themselves, investing in various types of projects. In return, they get a product or service.

My project is quite big and I want to achieve about £200,000. All the money will be spent on business, thanks to which people will get free service as part of investing in the project.

Now the question:

How much tax I will have to pay from £200,000? Do I have to count it as my income? and calculate 20% tax and above £46,351 higher rate of 40%. Or can I register as LTD and pay 20% VAT?

I remind that the entire amount of £200,000 will be spent on business development, I will not make profits from £200,000. I even intend to add £15,000 from my savings

King regards!
Justina

Dazed_and_confused · 3 March 2019 at 5:24PM

Have you considered getting professional advice?

£200k is a lot of money if you get this wrong. Which you are in grave danger of.

agrinnall · 3 March 2019 at 5:26PM

If you are genuine you should be seeking professional help rather than asking strangers on the internet. Personally I think anyone who would be prepared to invest in someone who doesn't already know the answers to those questions would be taking a huge risk.

Pennywise · 3 March 2019 at 5:36PM

Surely you've already decided on whether it's a limited company or not. Pretty sure that's fundamental to prospective investors and they won't appreciate (or agree to) you changing it to a limited company if they've invested in you as a sole trader.