Do YouTubers pay taxes? All the streamers often wonder about whether the YouTubers pay taxes if they are residing and working in the UK. This is a frequently asked question these days. In the case, you are a Youtuber who owns a youtube channel and you make some money from your activity, the chances are to get noticed by HMRC. This means your popularity on the youtube channel is not only noticed by your followers but HMRC notices it as well. As HMRC works for the government to collect taxes on applicable work streams, it will require you to expose the income you are making through your youtube channel.
The question that arises here is why and how this happens. You must be aware of the fact that the income an individual makes from merchandise, streaming donations, and advertising revenue is taxable like other income sources. This was the history of the past when youtube was only considered as a hobby thing. In this era, if you have a youtube channel and you are making money through it, you are liable to declare the income source while you are submitting your tax returns. In this guide, you will gather information about how YouTubers pay taxes, what if it is a side gig, and how to claim your money back.
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Do I Need to Pay Taxes as a YouTuber?
You are liable to pay tax if you are a resident in the UK who is earning money by putting content on a youtube channel. It is technically considered a business when you are being paid for doing something and someone is connected to you for this purpose. This will be just like offering your services or products. You might consider it as a hobby or doing something you like to do, however, making youtube videos is no more just a hobby.
The rules set by HMRC are very strict when it comes to taxable income sources. People often confuse youtube channels and relevant activities with enjoyment, however, it has now become an income source and the income you are making through your channel is taxable. If you try to keep your youtube income hidden and do not declare it with your tax returns, you are in trouble. The chances are that you will have to pay a penalty for not declaring your income promptly. You can even go under investigation from HMRC.
Moreover, if you are a content creator and using a youtube channel, the following factors are very important to consider:
- What is the amount of money you are earning from your youtube channel?
- How have you earned the money from this source?
- Keep the bank statements, business receipts, and invoice copies with you to maintain your records well.
- Provide the relevant information while submitting your tax returns, so that HMRC can calculate the taxable amount and you are in no scenario of being punished for not declaring your income fairly.
What if YouTube is a Side-Gig?
Several people are using their youtube channel as a side gig while maintaining their main job. However, this side thing is also helping them to make a little extra money. Now the questionable part here is whether to pay tax on this side gig or not. Well yes, this income is taxable in most cases. Sometimes the earned income from your youtube channel is untaxed which is not the case when you are earning through your main job.
When you are working a full-time job or part-time job, the salary you get is already gone through the process of deductions of income tax and national insurance. However, in the case of earning from youtube, you will be responsible to handle the tax payments.
How to Pay Tax – Do YouTubers Pay Taxes?
As discussed above that you are liable to pay taxes at the time you are submitting your self-assessment tax returns if you are using a youtube channel to make money. If the amount of money you are making in one tax year is going above £12,570, you are liable to do tax returns. We all know that the error margin is slim when it comes to HMRC dealing with taxes. It is advisable to get professional help. You can choose any one of the following to do the process.
- Do the process of your tax returns and get in touch with HMRC.
- You can hire a professional to get help in the process.
- An online smart alternative can be hired to help you complete the process.
Learn to Claim Your Money Back
It is a beneficial part of taking your self-assessment tax returns seriously that will make you eligible for claiming the money back. This involves the money that you have spent on buying equipment or other relevant stuff for your youtube channel content. If you are getting a trade allowance already, you are in no position to claim the money back.
Furthermore, you will have to prove that the purchased products are solely for the youtube channel and not for any personal use.
The Bottom Line
Now that you have gathered a fair amount of information about do YouTubers pay tax, we can bring the discussion towards wrapping up. It seems to be fun as a hobby to create the content you like for your subscribers on youtube channels, however, the rules are pretty strict about paying tax if your income has crossed a certain limit. If you fail to follow the rules, you will have to pay hefty fines as compensation. We hope these few minutes of reading have helped you to develop a better understanding.
Reach out to one of our professionals to know the best way to choose the correct way of paying tax as a YouTuber. We will love to offer instant help!
Disclaimer: The information about Do YouTubers pay taxes provided in this blog includes text and graphics of general nature. It does not intend to disregard any of the professional advice.
