advice Tax on sales

Laguna · Jan 8, 2019

Hi guys, having not sold a damain before, I was wondering what happens when you do regarding tax. I'm in the UK so is tax automatically taken from sale or do I have to declare all sales earnings to the tax office and pay as self employed ?
To your relief I won't be responding to any advice but I will be watching and learning. Thank you

briguy · Jan 8, 2019

This Canadian claims all his sales and online income.."paper trial"

Sure dont want what I didnt do this year biting me in the azz next year or the year after

maxtra · Jan 8, 2019

All my transactions go to my QuickBooks Self-Employed account and I calculate/pay tax there

From USA

creataweb · Jan 8, 2019

Hire a tax pro is the best way to go. Different laws everywhere

MapleDots · Jan 8, 2019

There are income taxes and Sales taxes in most places

In Canada we have to collect sales tax if you sell over 25k a year which for me is pretty well every year.

I do get that tax back but I then have to claim my income under income tax but right now I am spending any profits on new purchases so the tax base goes way down.

Anyone that tries to circumvent taxes (and trust me I know a lot of people that do) will eventually get caught. Other than bitcoin all forms of payment including Paypal are government monitored and Paypal is mandated to report funds moving through accounts.

Taxes seem to be something a lot of domainers think they are immune too.
If you run domaining like a business there are tax advantages so simply reporting income and not registering as a business leaves a lot of money on the table that could go back into profits.

Varies country to country but in most cases the principles are the same.

D Haynes · Jan 8, 2019

I'm no expert but here what I've been led to believe...

You don't have to declare anything less than a grand.

Between a 1 and 11850ish grand (depending on your personal tax allowance) you don't have to pay tax but have to declare your earnings.

Bare in mind these figures are for everything you earn over all income streams whether it's domaining or your day job.

For domaining income (if it becomes big enough) you'd have to set up as self employed and do a tax return (self assessment on line is easy) every year.

Also remember that you would only pay tax on any proffit and not the final sales price so you would take off the purchase price of the name and any listing fees or renewals etc and there's probably ways you can write off tax through expenses (office fees, company vehicle, business dinners, reinvesting into new inventory etc).

This is just what I've been led to believe and should not be taken as fact. If you sell enough names to pay tax you should research thoroughly. HMRC website is easy to use.

lock · Jan 8, 2019

The idea is earn lots and get an accountant to worry about it for you.
I am trying to slash dot tax with a domain name my last reg hehe..

NickB · Jan 8, 2019

Lagunaboy said:
Hi guys, having not sold a damain before, I was wondering what happens when you do regarding tax. I'm in the UK so is tax automatically taken from sale or do I have to declare all sales earnings to the tax office and pay as self employed ?
To your relief I won't be responding to any advice but I will be watching and learning. Thank you

https://www.gov.uk/government/publi...ent-helpsheet/hs325-other-taxable-income-2018

eurorealtor · Jan 8, 2019

In Czech Republic is a new Sales Revenue Law system called ETT, Tax office is getting control of every transaction right away. As of now it is "only" working for cash and terminal transactions (item sold over the counter). But I am pretty sure soon they'll find out a way how to cover all "holes". And I think UK may have a similar tax law. This is my first tax filling in the EU since 2003. In the US it was "pretty simply"

1. An entrepreneur sends an XML transaction data message to the Financial Management system.
2. The Fiscal Identification Code is sent from the Financial Administration system.
3. An entrepreneur issues a receipt (including a fiscal identification code) to the customer.
4. he customer receives a bill.
5. The customer can verify their receipt on the Tax Portal, and the entrepreneur will verify the sales recorded under his name in the Electronic Revenue Records web application.

Furquan · Jan 8, 2019

My Gov takes 18% (it's ridiculous but what I can do).

It's called GST & The last month alone Paypal sent Rs, 9k to my gov. Again it's ridiculous but what I can do.

I am after all a poor student who doesn't even know anything.

D Haynes · Jan 8, 2019

Furquah said:
My Gov takes 18% (it's ridiculous but what I can do).

It's called GST & The last month alone Paypal sent Rs, 9k to my gov. Again it's ridiculous but what I can do.

I am after all a poor student who doesn't even know anything.

UK higher tax bracket is 45%. Not THATS ridiculous lol. Easy to see why people try to dodge it.

Furquan · Jan 8, 2019

D Haynes said:
UK higher tax bracket is 45%. Not THATS ridiculous lol. Easy to see why people try to dodge it.

Now please compare the UK per Capita income to India per Capita, you will see why I said is ridiculous

Screenshot_2019-01-08-16-25-24-113_com.android.chrome.png

.......

Screenshot_2019-01-08-16-26-30-224_com.android.chrome.png

Bob Hawkes · Jan 8, 2019

Of course you need to look into the situation for your country and state/region.

There are potentially two types of tax.

Do you have to charge tax when you sell? In Canada, if you expect sales of $30,000 or more you need to GST/HST register and charge (but it also gives you benefits on claiming tax you paid). If less than that it is optional. I note that $25,000 was quoted by @MapleDots so maybe there are provincial rules that kick in a bit earlier. I am always safely below either figure and I have not opted to charge.
You must, as I understand it, claim money made as income, no matter the business arrangement you have, and I have always done that. The legal structure you use (e.g. sole propritorship vs registered corporation) influences how you report it. As a small business you can report certain things as expenses, so it is not strictly net revenue vs acquisition costs. It is a headache to track things (I use spreadsheets) but it is essential to do so.

Bob

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