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Uk and paying VAT
HI girls,
Ok, so I wondered if any of you lovely ladies could give me some info on this before I bombard my accountant with 1001 questions ;D
Now, I know that you don't have to be VAT registered in the UK until you reach the threshold of £85,000 (2017/2018). My question is -
If working on cam you were to reach that threshold (which lets face it, could be done if you work looong hours and multiple sites), would it be worth it? I'm a bit confused about whether we would pay VAT at all on our earnings even if we went over the threshold because the sites are all abroad so don't come under the UK VAT rules, well apart from AW?
So for example i'll pick a nice round number - say I earned £100,000 in a 12 month rolling period (as VAT dictates) would I then need to take -
20% off my full 12 month profit PLUS
Whatever tax is due?
If that's the case then it definitely wouldn't be worth going over the threshold!
I've seen various things on here and tried to read up on it but its quite confusing, but its something I've been wondering about for a while now as I'm not getting any younger and want to maximise the amount of money I can make - at the moment I split various sites but am not putting in the necessary hours but my hourly suggests that if I did I could reach the threshold but the uncertainty of whether or not I would then have to pay over a large chunk of my earnings in VAT is a sticking point because as we all know there is really not an awful lot we can reclaim the VAT back on (well, certainly not as much as we have paid out!)
Also I receive all of my pay via daily pay so does that fall under the B2B rules? Sorry I'm just soo confused with this and no matter how much I try to google it or read up on it, its just not sinking in aaarggghhh /:O
Any lovely ladies that can offer any words of advice - I thank you in advance ;D
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Re: Uk and paying VAT
I have never heard of a camgirl who has been VAT registered. All the girls I know have stayed under the threshold. Also just because it is set at £85,000, does not mean you should work to just under it, say £84,000, to be safe best to work a few thousand under it. I knew someone in a different business who went over it a little by accident and didnt realise until their accountant did their books at the end of the year which was disasterous.
So if you earnt £100,000, you would pay 20% in VAT and do a return every 3 months, you could claim some of that back when you did a return, but, if you are anything like me, and your expenses were small say £500 a month, thats nothing, 20% VAT on £500 is just £100.
So as an example £8333.33 a month earnings (£100,000 /12)
less £1666 VAT (20% of your earnings/the above figure)
you can claim back £100 on your costs as they were £500
meaning total VAT due is £1566
Then you will also have to pay tax on your earnings. You can see it is not worth it unless you are earning much much more than £100,000. Also, businesses that are VAT registered get inspected every few years as a matter of routine, it happened in 2 places I worked at. It means more paperwork and added accountancy costs.
So my advice would be definately stay under it.
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Re: Uk and paying VAT
Hi Melissa and thanks for your reply :)
I don't know if I'm just not grasping this correctly but I'm sure I saw someone wrote in a different thread recently about the VAT only being paid by the people supplying the service used for broadcasting and not the broadcasters themselves?
I know that Dailypay absorb the VAT on AW because its a B2B transaction? So does that not essentially mean that I wouldn't have to pay VAT on my earnings anyway? Also all the sites I work on (with the exception of AW) are US sites or outside the scope of UK VAT rules so surely no VAT would be payable on anything I was to earn on those either? God this is confusing lol
Many thanks for any more help with this ladies - and if anyone is VAT registered that could offer some more insight I would be very grateful :)
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Re: Uk and paying VAT
It's based on your income, it doesn't matter if it comes from sites outside the UK. It's really best if you speak to your accountant about it.
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Re: Uk and paying VAT
Hi, yes exactly as Katy said, it is based on your income. Your accountant will know all the details. I was VAT registered in a previous business nothing to do with the sex industry though and did returns so have quite a bit of experience of it, but this is definately a matter for your accountant.