Post by account_disabled on Dec 5, 2023 8:29:50 GMT
Individuals who earn affiliate income as part of a side-gig and remain in full-time employment are advised to be aware that income tax will be determined on the basis of combined earnings. Therefore, when calculating taxable income, it’s important to include all earnings over the course of the tax year.
Affiliates registering with HMRC as self-employed Telegram Number will also be subject to National Insurance payments on any business profits over the personal allowance thresholds noted above. For affiliates in self-employment, National Insurance rates will fall under either Class 2 or Class 4.
For the 2022/2023 tax year, the National Insurance rates are as follows:
Class 2 National Insurance - £3.15 per week on profits over £6,725 per year
Class 4 National Insurance - 9.73% on profits between £11,908 and £50,270 and 2.72% on any profits above that amount.
Affiliate Income and Accurate Accounting
An accounting software dashboard(An accounting software dashboard)
A crucial part of sustaining a small business (or a career being self-employed) is maintaining accurate accounting records. Therefore, keeping track of accounting matters and upcoming dates for due payments is a fundamental part of any tax-abiding individual or company owner. Thus, to help self-employed individuals (and also small business owners) with this endeavour the government introduced the Making Tax Digital initiative which obligated businesses to keep digitalised records as well to submit regular updates to HMRC. The idea is to facilitate a faster, more streamlined taxation process. In order to take advantage of these systems and report any business earnings to HMRC in a more simplified way, businesses are required to have MTD (Making Tax Digital) compliant software. From April 2024 this system will apply to anyone registered for self-assessment, which is where most UK affiliates are likely to be positioned.
Allowable Expenses for Affiliates
Self-employed individuals are permitted to make certain deductions from the costs of running a business. These are commonly known as allowable expenses. For instance, if an affiliate has an annual income of £35,000 but claims back £5,000 in allowable expenses, the tax will only be paid on the remaining amount of £30,000 (the taxable profit).
Below are some of the standard expenses that self-employed individuals in the affiliate industry may not have to pay taxes on.
Affiliates registering with HMRC as self-employed Telegram Number will also be subject to National Insurance payments on any business profits over the personal allowance thresholds noted above. For affiliates in self-employment, National Insurance rates will fall under either Class 2 or Class 4.
For the 2022/2023 tax year, the National Insurance rates are as follows:
Class 2 National Insurance - £3.15 per week on profits over £6,725 per year
Class 4 National Insurance - 9.73% on profits between £11,908 and £50,270 and 2.72% on any profits above that amount.
Affiliate Income and Accurate Accounting
An accounting software dashboard(An accounting software dashboard)
A crucial part of sustaining a small business (or a career being self-employed) is maintaining accurate accounting records. Therefore, keeping track of accounting matters and upcoming dates for due payments is a fundamental part of any tax-abiding individual or company owner. Thus, to help self-employed individuals (and also small business owners) with this endeavour the government introduced the Making Tax Digital initiative which obligated businesses to keep digitalised records as well to submit regular updates to HMRC. The idea is to facilitate a faster, more streamlined taxation process. In order to take advantage of these systems and report any business earnings to HMRC in a more simplified way, businesses are required to have MTD (Making Tax Digital) compliant software. From April 2024 this system will apply to anyone registered for self-assessment, which is where most UK affiliates are likely to be positioned.
Allowable Expenses for Affiliates
Self-employed individuals are permitted to make certain deductions from the costs of running a business. These are commonly known as allowable expenses. For instance, if an affiliate has an annual income of £35,000 but claims back £5,000 in allowable expenses, the tax will only be paid on the remaining amount of £30,000 (the taxable profit).
Below are some of the standard expenses that self-employed individuals in the affiliate industry may not have to pay taxes on.