Making money online and taxes

trainwreck

I hope I've posted this in the right place. I'm not sure where else to turn. For the past three years I've made money online selling my digital artwork on a website called Redbubble. This is known as Print on Demand (POD). Basically how it works is I upload my digital design to the website and RB prints it on physical products such as T-shirts, stickers, notebooks etc. Then I receive a royalty for every sale made. I get paid monthly through Paypal. I do no physical work.


I have not declared this income the past 3 years and I am very worried that I will get in trouble if I do now. There is absolutely zero information online to how you declare this type of income. I am also on benefits and do not work and I am worried if I declare this income I will lose my benefits. It is not a stable income source because I am at the mercy of Redbubble and you never know my account could be shut down for any reason and my income would stop just like that.



Can anyone offer me any advice? It would be much appreciated.

Browntoa

How much money are we talking about ?

trainwreck

It varies. One month it could be £500 the next £1500. I'm in bits over this. I really want to declare it but don't know how.

soolin

trainwreck wrote: »

It varies. One month it could be £500 the next £1500. I'm in bits over this. I really want to declare it but don't know how.

Ouch, yes this needs to be sorted immediately before it gets worse .

Two ways, phone HMRC and declare it , apologise profusely, admit to being completely out of your depth with knowing how to declare this properly. If you do this they can 'register' your self employment but you will need to be very quick getting your accounts in for the past 3 years as HMRC will raise their own estimates (which will be high) and you need to be in a position to talk it down to the proper level.

Alternatively get an accountant engaged today, you may struggle a little as this is a busy time of year for them- but do it now. Let them make the declaration - but again you will need to have your figures available for accounts to be drawn up.

I urge you to declare though today or at least very soon, best to admit to an error rather than let HMRC 'catch you', you are still likely to be able to talk this down to being a bit forgetful or unsure, rather than a deliberate attempt to defraud HMRC and DWP.

Re benefits- that is out of my field - although in a past 'job' I did advise people who were caught with on the side businesses, and strangely enough most were caught by DWP who take this really very seriously , rather than HMRC who start off with a softer 'have you forgotten to tell us something' letter.

Whether or not this affect your benefits, and whether tax and NI is due can't be confirmed without knowing which benefits you receive. Some benefits will not be affected- but should still have been declared, other benefits will now have been overpaid - but that is perhaps something for the benefits board to assist with. Likewise with tax and NI, it depends on which benefits and which have used any part of your personal allowances, NI depends on your age amongst other things.

I really cannot urge you strongly enough to start trying to sort this today, having advised on this exact situation in the past I have seen how quickly it can escalate and cause serious issues and at the very least this needs to be declared before they find out.

sn1987a

The deadline for online self assessment tax return for the year 2018-2019 is 31/1/2020, so I would hurry if I were you so at least you don't pay a penalty for 2018-19. For the financial year 2019-2020, you don't have to worry yet, the tax return will need to be filled after April.


You may have to pay penalty for any income received in 2017-2018. There are some exceptions.

https://www.gov.uk/self-assessment-tax-returns/deadlines


I used to do mystery shopping, I wasn't earning enough to pay taxes but I registered as self employed and I was declaring every year the extra money I was receiving. I was keeping track of the income using an excel file.



I would call as soon as possible, HMRC should be able to help you. I don't know how your benefits would be affected, sorry I can't advise you on this part.

Dazed_and_confused

You should ignore the first half of the previous post.

You cannot be fined for failing to file a return you haven't even been asked to complete.

You need to register as self employed with HMRC and they will then issue you with returns or a notice to file a return for each year applicable.

You will then get 3 months from the date the return/notice to file is issued to file the completed returns. Late filing penalties can only be charged if you fail to meet this deadline.

Note that the due date for payment of any tax due will be the statutory date, for example 2017:18 tax should have been paid by 31:01:2019 and you will be charged late payment interest for anything paid late.

You may want to engage an accountant to help with this. If so speak to friends and family to see if they are able to recommend anyone. You may find most accountants are very busy throughout January so it may be February before they can put much time into a new client.

Dazed_and_confused

I have not declared this income the past 3 years and I am very worried that I will get in trouble if I do now. There is absolutely zero information online to how you declare this type of income. I am also on benefits and do not work and I am worried if I declare this income I will lose my benefits. It is not a stable income source because I am at the mercy of Redbubble and you never know my account could be shut down for any reason and my income would stop just like that.

You are far more likely to get into trouble (and ultimately have more to pay) by not declaring it now.

There is a vast amount of information online about declaring additional income or registering as self employed. That won't wash with HMRC and it seems more of an excuse to avoid dealing with this.

There may well be impacts on your benefits but if you don't notify DWP you are running the risk of being prosecuted for benefit fraud.

chrisbur

Plenty of excellent advice regarding sorting out your tax/benefit problems but when that is sorted I would suggest that you consider expanding your self employment. You are doing extremely well on Redbubble. Look around at other POD sites to get a wider customer base (make sure you only offer as non-exclusive if using same pics)
eg Fineartamerica and DeviantArt
You might also consider image libraries
eg Alamy

trainwreck

soolin wrote: »

Ouch, yes this needs to be sorted immediately before it gets worse .

Two ways, phone HMRC and declare it , apologise profusely, admit to being completely out of your depth with knowing how to declare this properly. If you do this they can 'register' your self employment but you will need to be very quick getting your accounts in for the past 3 years as HMRC will raise their own estimates (which will be high) and you need to be in a position to talk it down to the proper level.

Alternatively get an accountant engaged today, you may struggle a little as this is a busy time of year for them- but do it now. Let them make the declaration - but again you will need to have your figures available for accounts to be drawn up.

I urge you to declare though today or at least very soon, best to admit to an error rather than let HMRC 'catch you', you are still likely to be able to talk this down to being a bit forgetful or unsure, rather than a deliberate attempt to defraud HMRC and DWP.

Re benefits- that is out of my field - although in a past 'job' I did advise people who were caught with on the side businesses, and strangely enough most were caught by DWP who take this really very seriously , rather than HMRC who start off with a softer 'have you forgotten to tell us something' letter.

Whether or not this affect your benefits, and whether tax and NI is due can't be confirmed without knowing which benefits you receive. Some benefits will not be affected- but should still have been declared, other benefits will now have been overpaid - but that is perhaps something for the benefits board to assist with. Likewise with tax and NI, it depends on which benefits and which have used any part of your personal allowances, NI depends on your age amongst other things.

I really cannot urge you strongly enough to start trying to sort this today, having advised on this exact situation in the past I have seen how quickly it can escalate and cause serious issues and at the very least this needs to be declared before they find out.

Can I be self employed and be on certain benefits at the same time? Does earning royalties even come under the category of self employed? I do no physical work. I sell no services. I'm not a business. I don't own the company Redbubble. I just earn a royalty for every sale on the website. What would happen if I did register as self employed then I suddenly lost this income?



Thank you for taking the time to explain this. I'm not a business but I'm confused about how to tell them about the last 3 years income. If I do declare the last 3 years will I just have to pay a lump sum/penalty for each year or could I get into trouble?



Also I am in the unique situation where somebody else (my mum) is classed as my carer (I have aspergers and other problems) and she takes care of my finances. I don't know how to even explain this situation to the benefits ppl. I don't even know how to contact them or who to speak to.


My biggest fear is declaring this income, getting penalised, losing all of my benefits and having to rely on this unstable income source which could end at any time. Sometimes I think should I just shut it down for now and start selling my art again if I begin working in the future.



I wouldn't know how to hire an accountant.

This whole thing is causing me a lot of stress.

soolin

Ask your mother to contact DWP and HMRC on your behalf , as your career she should be able to do that, although you might briefly have to speak to them to acknowledge she has permission to do so.

Without knowing your exact benefits received we cannot advise whether they are affected or not. Some benefits won't be affected at all, but some will be either by the income you receive or if you have savings over a certain level.

As for running a business, you are not a 'company' but you are a business and even as a sole trader receiving money for passive work this should have been declared.

Regarding an accountant, perhaps again this is something your mother can assist you with.