Making money via gifts or donations

The_Numpty_2

Hi folks. I've done a quick search for this one and haven't seen it come up before, but to be honest there's so much info and advice here it's hard even to know where to search and what to search for!

Anyway, I have a regular day job in which I'm earning within the usual 22% tax band and am looking to get a wee bit extra money on the side. Yes there are plenty of those threads, but this one's slightly different.

I write computer software which I make available for free online, and some people have asked if they can send me money as an appreciation of my time/work. As far as I know, there is no taxation on gifts in the UK but does that extend to gifts of money? If people are choosing to donate money to me for software which I'm freely providing, do I have to register as self employed and pay tax on it? Can I keep the software free and and the same time ask users for donations/gifts as a sign of appreciation?

Thank you for any advice you can give.

Norfolk_Jim

I would think that freeware providers have to pay taxes. Gratuities for waiters and taxi drivers are taxable. I would think that the IR will see this the same way, especially if you even so much as hint at the idea in any way shape or form it would be seen as soliciting a gift. Thin Ice - dont risk it.
Why not just register your business and pay tax on it - if you made a loss you could offset that against the taxes you pay in your day job.

graham08

I don't see why you would bother paying tax on such things. I've known 100's of software developers who get donations from freeware they produce and I highly doubt they're paying tax on it. If you're using paypal for donations they'll take a cut of that and then if you add tax on that it hardly seems worth it.

Above all I don't think anyones going to track you down for getting donations for this sort of thing