Side Hussles and Paying Tax
Discussion
Morning Folks,
Since January i've created what can be described as a side hussle and i want to know whats the rules with regards to tax, and the reality of it actually being an issue/me geting a letter from HMRC.
I manage a gaming community which has 15k Members, I manage 4 gaming servers which are based in Los Angeles, The Majority of the gaming community are US Based, but there are a few EU, NA members.
The Side hussle part of it is members can pay me for essentially generated Pixels in game, to give them items in game, generated/spawned in etc. There is no physical items.
Payments are made to me via Paypal, and Paypal only, Most send as "goods and services", some do send as friends and Family.
I tend to keep the money in my paypal account and pay for things from there as and when i need things, so i dont transfer it to my bank account and all.
The Process is as simple as someone messaging me saying i would like to buy x,y,z item, sending you the money now (which could range from $4 up to $80 depending on how many items they would like to buy.
I would then with a few clicks on my phone send it to their in game account using their Xbox or PS username and thats it done.
Since January i have probably made £7/8K give or take, which is sent as Dollars as US based as previously mentioned.
Now, a quick google suggests paypal does notify HMRC of activities related to side hustles etc, what are my chances?, does it make a difference being Digitally generated items?, or the fact its based out in US. I don't know, i'm just trying to get a lay of the land, i'm, already well into being a higher rate taxpayer so any advice would be welcome.
Thanks, and have a good day
Since January i've created what can be described as a side hussle and i want to know whats the rules with regards to tax, and the reality of it actually being an issue/me geting a letter from HMRC.
I manage a gaming community which has 15k Members, I manage 4 gaming servers which are based in Los Angeles, The Majority of the gaming community are US Based, but there are a few EU, NA members.
The Side hussle part of it is members can pay me for essentially generated Pixels in game, to give them items in game, generated/spawned in etc. There is no physical items.
Payments are made to me via Paypal, and Paypal only, Most send as "goods and services", some do send as friends and Family.
I tend to keep the money in my paypal account and pay for things from there as and when i need things, so i dont transfer it to my bank account and all.
The Process is as simple as someone messaging me saying i would like to buy x,y,z item, sending you the money now (which could range from $4 up to $80 depending on how many items they would like to buy.
I would then with a few clicks on my phone send it to their in game account using their Xbox or PS username and thats it done.
Since January i have probably made £7/8K give or take, which is sent as Dollars as US based as previously mentioned.
Now, a quick google suggests paypal does notify HMRC of activities related to side hustles etc, what are my chances?, does it make a difference being Digitally generated items?, or the fact its based out in US. I don't know, i'm just trying to get a lay of the land, i'm, already well into being a higher rate taxpayer so any advice would be welcome.
Thanks, and have a good day
In short, HMRC would see that as taxable income from self employment even though it is all digital and most of your buyers are in the US. They care about where you live, not where the money comes from.
Once you are making over a thousand pounds a year, you are meant to register for self assessment and declare it as extra income. You can claim reasonable costs like server fees, hosting, software and PayPal fees.
Since you are already a higher rate taxpayer, anything you make here will likely be taxed at forty percent after expenses. PayPal now shares data with HMRC under new reporting rules, so it is better to declare it than hope it goes unnoticed.
Keeping the money in PayPal does not avoid tax, if you earn it, it is taxable whether you move it to your bank or not.
So just treat it as a small self employed side gig and you will be fine. Plenty of people do the same thing.
Once you are making over a thousand pounds a year, you are meant to register for self assessment and declare it as extra income. You can claim reasonable costs like server fees, hosting, software and PayPal fees.
Since you are already a higher rate taxpayer, anything you make here will likely be taxed at forty percent after expenses. PayPal now shares data with HMRC under new reporting rules, so it is better to declare it than hope it goes unnoticed.
Keeping the money in PayPal does not avoid tax, if you earn it, it is taxable whether you move it to your bank or not.
So just treat it as a small self employed side gig and you will be fine. Plenty of people do the same thing.
a311 said:
In short, HMRC would see that as taxable income from self employment even though it is all digital and most of your buyers are in the US. They care about where you live, not where the money comes from.
Once you are making over a thousand pounds a year, you are meant to register for self assessment and declare it as extra income. You can claim reasonable costs like server fees, hosting, software and PayPal fees.
Since you are already a higher rate taxpayer, anything you make here will likely be taxed at forty percent after expenses. PayPal now shares data with HMRC under new reporting rules, so it is better to declare it than hope it goes unnoticed.
Keeping the money in PayPal does not avoid tax, if you earn it, it is taxable whether you move it to your bank or not.
So just treat it as a small self employed side gig and you will be fine. Plenty of people do the same thing.
Thanks for the quick reply, and that all makes sense thankyou. Once you are making over a thousand pounds a year, you are meant to register for self assessment and declare it as extra income. You can claim reasonable costs like server fees, hosting, software and PayPal fees.
Since you are already a higher rate taxpayer, anything you make here will likely be taxed at forty percent after expenses. PayPal now shares data with HMRC under new reporting rules, so it is better to declare it than hope it goes unnoticed.
Keeping the money in PayPal does not avoid tax, if you earn it, it is taxable whether you move it to your bank or not.
So just treat it as a small self employed side gig and you will be fine. Plenty of people do the same thing.
Gazzas86 said:
Morning Folks,
Since January i've created what can be described as a side hussle and i want to know whats the rules with regards to tax, and the reality of it actually being an issue/me geting a letter from HMRC.
I manage a gaming community which has 15k Members, I manage 4 gaming servers which are based in Los Angeles, The Majority of the gaming community are US Based, but there are a few EU, NA members.
The Side hussle part of it is members can pay me for essentially generated Pixels in game, to give them items in game, generated/spawned in etc. There is no physical items.
Payments are made to me via Paypal, and Paypal only, Most send as "goods and services", some do send as friends and Family.
I tend to keep the money in my paypal account and pay for things from there as and when i need things, so i dont transfer it to my bank account and all.
The Process is as simple as someone messaging me saying i would like to buy x,y,z item, sending you the money now (which could range from $4 up to $80 depending on how many items they would like to buy.
I would then with a few clicks on my phone send it to their in game account using their Xbox or PS username and thats it done.
Since January i have probably made £7/8K give or take, which is sent as Dollars as US based as previously mentioned.
Now, a quick google suggests paypal does notify HMRC of activities related to side hustles etc, what are my chances?, does it make a difference being Digitally generated items?, or the fact its based out in US. I don't know, i'm just trying to get a lay of the land, i'm, already well into being a higher rate taxpayer so any advice would be welcome.
Thanks, and have a good day
Have you checked out any US tax implications?Since January i've created what can be described as a side hussle and i want to know whats the rules with regards to tax, and the reality of it actually being an issue/me geting a letter from HMRC.
I manage a gaming community which has 15k Members, I manage 4 gaming servers which are based in Los Angeles, The Majority of the gaming community are US Based, but there are a few EU, NA members.
The Side hussle part of it is members can pay me for essentially generated Pixels in game, to give them items in game, generated/spawned in etc. There is no physical items.
Payments are made to me via Paypal, and Paypal only, Most send as "goods and services", some do send as friends and Family.
I tend to keep the money in my paypal account and pay for things from there as and when i need things, so i dont transfer it to my bank account and all.
The Process is as simple as someone messaging me saying i would like to buy x,y,z item, sending you the money now (which could range from $4 up to $80 depending on how many items they would like to buy.
I would then with a few clicks on my phone send it to their in game account using their Xbox or PS username and thats it done.
Since January i have probably made £7/8K give or take, which is sent as Dollars as US based as previously mentioned.
Now, a quick google suggests paypal does notify HMRC of activities related to side hustles etc, what are my chances?, does it make a difference being Digitally generated items?, or the fact its based out in US. I don't know, i'm just trying to get a lay of the land, i'm, already well into being a higher rate taxpayer so any advice would be welcome.
Thanks, and have a good day
LooneyTunes said:
Gazzas86 said:
Morning Folks,
Since January i've created what can be described as a side hussle and i want to know whats the rules with regards to tax, and the reality of it actually being an issue/me geting a letter from HMRC.
I manage a gaming community which has 15k Members, I manage 4 gaming servers which are based in Los Angeles, The Majority of the gaming community are US Based, but there are a few EU, NA members.
The Side hussle part of it is members can pay me for essentially generated Pixels in game, to give them items in game, generated/spawned in etc. There is no physical items.
Payments are made to me via Paypal, and Paypal only, Most send as "goods and services", some do send as friends and Family.
I tend to keep the money in my paypal account and pay for things from there as and when i need things, so i dont transfer it to my bank account and all.
The Process is as simple as someone messaging me saying i would like to buy x,y,z item, sending you the money now (which could range from $4 up to $80 depending on how many items they would like to buy.
I would then with a few clicks on my phone send it to their in game account using their Xbox or PS username and thats it done.
Since January i have probably made £7/8K give or take, which is sent as Dollars as US based as previously mentioned.
Now, a quick google suggests paypal does notify HMRC of activities related to side hustles etc, what are my chances?, does it make a difference being Digitally generated items?, or the fact its based out in US. I don't know, i'm just trying to get a lay of the land, i'm, already well into being a higher rate taxpayer so any advice would be welcome.
Thanks, and have a good day
Have you checked out any US tax implications?Since January i've created what can be described as a side hussle and i want to know whats the rules with regards to tax, and the reality of it actually being an issue/me geting a letter from HMRC.
I manage a gaming community which has 15k Members, I manage 4 gaming servers which are based in Los Angeles, The Majority of the gaming community are US Based, but there are a few EU, NA members.
The Side hussle part of it is members can pay me for essentially generated Pixels in game, to give them items in game, generated/spawned in etc. There is no physical items.
Payments are made to me via Paypal, and Paypal only, Most send as "goods and services", some do send as friends and Family.
I tend to keep the money in my paypal account and pay for things from there as and when i need things, so i dont transfer it to my bank account and all.
The Process is as simple as someone messaging me saying i would like to buy x,y,z item, sending you the money now (which could range from $4 up to $80 depending on how many items they would like to buy.
I would then with a few clicks on my phone send it to their in game account using their Xbox or PS username and thats it done.
Since January i have probably made £7/8K give or take, which is sent as Dollars as US based as previously mentioned.
Now, a quick google suggests paypal does notify HMRC of activities related to side hustles etc, what are my chances?, does it make a difference being Digitally generated items?, or the fact its based out in US. I don't know, i'm just trying to get a lay of the land, i'm, already well into being a higher rate taxpayer so any advice would be welcome.
Thanks, and have a good day
Similarly make sure you fully account for costs, if you do it right there shouldn't be any tax to pay... may involve setting the activity up in a LTD though.
- server costs
- proportion of your homes utility costs and rent
- refreshments provided
- phone bill
- PC and any AV equipment
- meals out for directors (could be you and your Mrs...) to discuss business ideas/trading etc
- server costs
- proportion of your homes utility costs and rent
- refreshments provided
- phone bill
- PC and any AV equipment
- meals out for directors (could be you and your Mrs...) to discuss business ideas/trading etc
Gazzas86 said:
LooneyTunes said:
Gazzas86 said:
Morning Folks,
Since January i've created what can be described as a side hussle and i want to know whats the rules with regards to tax, and the reality of it actually being an issue/me geting a letter from HMRC.
I manage a gaming community which has 15k Members, I manage 4 gaming servers which are based in Los Angeles, The Majority of the gaming community are US Based, but there are a few EU, NA members.
The Side hussle part of it is members can pay me for essentially generated Pixels in game, to give them items in game, generated/spawned in etc. There is no physical items.
Payments are made to me via Paypal, and Paypal only, Most send as "goods and services", some do send as friends and Family.
I tend to keep the money in my paypal account and pay for things from there as and when i need things, so i dont transfer it to my bank account and all.
The Process is as simple as someone messaging me saying i would like to buy x,y,z item, sending you the money now (which could range from $4 up to $80 depending on how many items they would like to buy.
I would then with a few clicks on my phone send it to their in game account using their Xbox or PS username and thats it done.
Since January i have probably made £7/8K give or take, which is sent as Dollars as US based as previously mentioned.
Now, a quick google suggests paypal does notify HMRC of activities related to side hustles etc, what are my chances?, does it make a difference being Digitally generated items?, or the fact its based out in US. I don't know, i'm just trying to get a lay of the land, i'm, already well into being a higher rate taxpayer so any advice would be welcome.
Thanks, and have a good day
Have you checked out any US tax implications?Since January i've created what can be described as a side hussle and i want to know whats the rules with regards to tax, and the reality of it actually being an issue/me geting a letter from HMRC.
I manage a gaming community which has 15k Members, I manage 4 gaming servers which are based in Los Angeles, The Majority of the gaming community are US Based, but there are a few EU, NA members.
The Side hussle part of it is members can pay me for essentially generated Pixels in game, to give them items in game, generated/spawned in etc. There is no physical items.
Payments are made to me via Paypal, and Paypal only, Most send as "goods and services", some do send as friends and Family.
I tend to keep the money in my paypal account and pay for things from there as and when i need things, so i dont transfer it to my bank account and all.
The Process is as simple as someone messaging me saying i would like to buy x,y,z item, sending you the money now (which could range from $4 up to $80 depending on how many items they would like to buy.
I would then with a few clicks on my phone send it to their in game account using their Xbox or PS username and thats it done.
Since January i have probably made £7/8K give or take, which is sent as Dollars as US based as previously mentioned.
Now, a quick google suggests paypal does notify HMRC of activities related to side hustles etc, what are my chances?, does it make a difference being Digitally generated items?, or the fact its based out in US. I don't know, i'm just trying to get a lay of the land, i'm, already well into being a higher rate taxpayer so any advice would be welcome.
Thanks, and have a good day
The tax year ends and begins in April so you may fall below the £1k threshold for Jan > April 25 but in this tax year (25/26) you will definitely be required to do a Self Assessment.
Whether you move it from PayPal is irrelevant as it is your bank account and you have earned the money. If you are Higher Rate then all the income will be taxed at 40%. A half decent accountant generally saves you more than they cost IMV (I am biased).
Gazzas86 said:
No, do i need to?
Given you say you are operating a US based business (which, with servers on the ground in the US and predominantly US based customers, it looks at first glance to be) it might be sensible to do so? It could be that it’s small enough to be exempt but probably worth knowing where any boundaries are. LooneyTunes said:
Abc321 said:
No, as mentioned before HMRC care about where you live not where it comes from.
It s not about HMRC As OP is domiciled in the UK and not a non dom, all income wherever it arises is subject to UK taxation. It is taxed on an "arising basis" not on a "remittance basis", ie it does not matter whether you keep the income in the USA or bring it into the UK, it is subject to UK tax anyway. That income is reported to HMRC via self assessment....use the SA Foreign Pages for this.
As for the USA, the double taxation agreement between UK and USA means that the USA income will be subject to USA withholding tax (15%), not USA income tax. This is achieved by completion and filing of a form W-8BEN (I think that's the right form). From what the OP says, maybe this will be accounted for by PayPal USA prior to the balance being remitted to UK. When reporting overseas earnings using the SA Foreign Pages, any withholding tax can be included and offset against the UK tax liability, and therefore it reduces the amount of overseas income subject to UK tax.
R.
So, since posting, and the helpful replies thankyou again,
i have downloaded my paypal statements, and as stated above, i'm ok up until 31st Mar 25, it will be this current year that will require me to declare etc.
I'm confused on how the amount of tax will be decided when i've been receiving in Dollars and keeping it in my account in Dollars, and when i come to spend i pay from my paypal balance (USD) and it converts it there and then to GBP.
What conversion rate gets used to work out my tax bill i guess is where im coming from?, i'm guessing i dont get a tax bill asking for me to pay in $$ so there must be a conversion to GBP at some point, where is that point? Thanks
i have downloaded my paypal statements, and as stated above, i'm ok up until 31st Mar 25, it will be this current year that will require me to declare etc.
I'm confused on how the amount of tax will be decided when i've been receiving in Dollars and keeping it in my account in Dollars, and when i come to spend i pay from my paypal balance (USD) and it converts it there and then to GBP.
What conversion rate gets used to work out my tax bill i guess is where im coming from?, i'm guessing i dont get a tax bill asking for me to pay in $$ so there must be a conversion to GBP at some point, where is that point? Thanks
Gazzas86 said:
So, since posting, and the helpful replies thankyou again,
i have downloaded my paypal statements, and as stated above, i'm ok up until 31st Mar 25, it will be this current year that will require me to declare etc.
I'm confused on how the amount of tax will be decided when i've been receiving in Dollars and keeping it in my account in Dollars, and when i come to spend i pay from my paypal balance (USD) and it converts it there and then to GBP.
What conversion rate gets used to work out my tax bill i guess is where im coming from?, i'm guessing i dont get a tax bill asking for me to pay in $$ so there must be a conversion to GBP at some point, where is that point? Thanks
I believe the onus is on you to convert the $ to £ using the conversion rate of the date when you actually receive.i have downloaded my paypal statements, and as stated above, i'm ok up until 31st Mar 25, it will be this current year that will require me to declare etc.
I'm confused on how the amount of tax will be decided when i've been receiving in Dollars and keeping it in my account in Dollars, and when i come to spend i pay from my paypal balance (USD) and it converts it there and then to GBP.
What conversion rate gets used to work out my tax bill i guess is where im coming from?, i'm guessing i dont get a tax bill asking for me to pay in $$ so there must be a conversion to GBP at some point, where is that point? Thanks
This would then be submitted to HMRC in £as part of your self assessment.
Gazzas86 said:
So, since posting, and the helpful replies thankyou again,
i have downloaded my paypal statements, and as stated above, i'm ok up until 31st Mar 25, it will be this current year that will require me to declare etc.
I'm confused on how the amount of tax will be decided when i've been receiving in Dollars and keeping it in my account in Dollars, and when i come to spend i pay from my paypal balance (USD) and it converts it there and then to GBP.
What conversion rate gets used to work out my tax bill i guess is where im coming from?, i'm guessing i dont get a tax bill asking for me to pay in $$ so there must be a conversion to GBP at some point, where is that point? Thanks
I receive dividends quarterly for shares I hold in a USA company. USA withholding tax is deducted by the USA administrator before I can access the dividends, net of that tax. I transfer the net dividends to the UK into my UK bank account. All the transactions are in USA $. When received into my UK bank account, the bank applies an exchange rate to record the amount in UK£. So, when I complete my SA each tax year, I use that conversion rate to record all the details required by HMRC in UK£: gross dividend, withholding tax, net dividend. That net dividend is then added to all my other UK income and UK tax calculated accordingly.i have downloaded my paypal statements, and as stated above, i'm ok up until 31st Mar 25, it will be this current year that will require me to declare etc.
I'm confused on how the amount of tax will be decided when i've been receiving in Dollars and keeping it in my account in Dollars, and when i come to spend i pay from my paypal balance (USD) and it converts it there and then to GBP.
What conversion rate gets used to work out my tax bill i guess is where im coming from?, i'm guessing i dont get a tax bill asking for me to pay in $$ so there must be a conversion to GBP at some point, where is that point? Thanks
HTH
R.
The Leaper said:
Gazzas86 said:
So, since posting, and the helpful replies thankyou again,
i have downloaded my paypal statements, and as stated above, i'm ok up until 31st Mar 25, it will be this current year that will require me to declare etc.
I'm confused on how the amount of tax will be decided when i've been receiving in Dollars and keeping it in my account in Dollars, and when i come to spend i pay from my paypal balance (USD) and it converts it there and then to GBP.
What conversion rate gets used to work out my tax bill i guess is where im coming from?, i'm guessing i dont get a tax bill asking for me to pay in $$ so there must be a conversion to GBP at some point, where is that point? Thanks
I receive dividends quarterly for shares I hold in a USA company. USA withholding tax is deducted by the USA administrator before I can access the dividends, net of that tax. I transfer the net dividends to the UK into my UK bank account. All the transactions are in USA $. When received into my UK bank account, the bank applies an exchange rate to record the amount in UK£. So, when I complete my SA each tax year, I use that conversion rate to record all the details required by HMRC in UK£: gross dividend, withholding tax, net dividend. That net dividend is then added to all my other UK income and UK tax calculated accordingly.i have downloaded my paypal statements, and as stated above, i'm ok up until 31st Mar 25, it will be this current year that will require me to declare etc.
I'm confused on how the amount of tax will be decided when i've been receiving in Dollars and keeping it in my account in Dollars, and when i come to spend i pay from my paypal balance (USD) and it converts it there and then to GBP.
What conversion rate gets used to work out my tax bill i guess is where im coming from?, i'm guessing i dont get a tax bill asking for me to pay in $$ so there must be a conversion to GBP at some point, where is that point? Thanks
HTH
R.
There are questions about where the trade is based - the servers are in the US but is the OP actually managing those servers or he is being paid for things that take place on those servers. If there is a US trade then there will be US taxation implications but if the trade is UK only then there won't.
You may be able to claim certain expenses but they have to be incurred "wholly and exclusively" for the purposes of that trade.
https://www.gov.uk/hmrc-internal-manuals/business-...
It is your responsibility to pay the relevant tax in the UK and, the US if relevant. It's not a straightforward area.
Boxster100 said:
Christ. And they wonder why people don t bother!
My thoughts exactly. Or you decide if the juice is worth the squeeze and you earn enough to pay for an accountant to sort it all out for you. If you're only concerned with this FY you don't have to submit for assessment until after end of Mar 26 and (I believe) have until Jan 27 to submit the return for the FY25-26.
Sole trader income limits for a side hustle runs per calendar year not tax year.
Tax year would be too easy and sensible.
Which would be bad.
You might get the numbers right if they did that.
But you're not going to get your numbers right anyway with your USA / UK salad.
I'd probably not bother.
Tax year would be too easy and sensible.
Which would be bad.
You might get the numbers right if they did that.
But you're not going to get your numbers right anyway with your USA / UK salad.
I'd probably not bother.
markh1973 said:
Nothing he gets is likely to have had WHT applied to it. He has a trade and is being paid a fee from a diverse group of people (some of whom could be US). Those individuals are not going to be withholding on it. Your dividends are investment income which is wholly different.
There are questions about where the trade is based - the servers are in the US but is the OP actually managing those servers or he is being paid for things that take place on those servers. If there is a US trade then there will be US taxation implications but if the trade is UK only then there won't.
You may be able to claim certain expenses but they have to be incurred "wholly and exclusively" for the purposes of that trade.
https://www.gov.uk/hmrc-internal-manuals/business-...
It is your responsibility to pay the relevant tax in the UK and, the US if relevant. It's not a straightforward area.
In my earlier post I set out how I need to report USA dividends to HMRC. Me not being a non dom, such dividends must be reported to HMRC on an arising basis, which is not really relevant because I remit them to the UK anyway. I've been doing so for about 30 years. I do find it straightforward, although there's only four transactions per year, so easy to keep track of.There are questions about where the trade is based - the servers are in the US but is the OP actually managing those servers or he is being paid for things that take place on those servers. If there is a US trade then there will be US taxation implications but if the trade is UK only then there won't.
You may be able to claim certain expenses but they have to be incurred "wholly and exclusively" for the purposes of that trade.
https://www.gov.uk/hmrc-internal-manuals/business-...
It is your responsibility to pay the relevant tax in the UK and, the US if relevant. It's not a straightforward area.
The OP is, I think, referring to earnings, not dividends, so it's overseas income not dividends. That income should be reported to HMRC via the relevant part of the Foreign Pages of the SA form. If there's no WHT applied in the USA, then it's a matter of the gross amount which will be then added to UK income for UK tax purposes.
As far as conversion from US$ to UK£ is concerned, I assume that potentially there will be lots of remitted transactions and each time there will be a conversion rate applied either before remittance, so by a USA entity, or after remittance, so likely a UK bank. So, it's matter of keeping good records of each remittance transaction, something like this perhaps:
- date of transaction in the USA,
- gross amount in US$,
- date remittance received in the UK,
- gross amount in UK£,
- exchange rate used for the transaction
That's how I think the transactions need to be dealt with etc. I may be wrong!
I assume the OP's USA income is potentially subject to USA tax so should be reported there too.
R.
The Leaper said:
markh1973 said:
Nothing he gets is likely to have had WHT applied to it. He has a trade and is being paid a fee from a diverse group of people (some of whom could be US). Those individuals are not going to be withholding on it. Your dividends are investment income which is wholly different.
There are questions about where the trade is based - the servers are in the US but is the OP actually managing those servers or he is being paid for things that take place on those servers. If there is a US trade then there will be US taxation implications but if the trade is UK only then there won't.
You may be able to claim certain expenses but they have to be incurred "wholly and exclusively" for the purposes of that trade.
https://www.gov.uk/hmrc-internal-manuals/business-...
It is your responsibility to pay the relevant tax in the UK and, the US if relevant. It's not a straightforward area.
In my earlier post I set out how I need to report USA dividends to HMRC. Me not being a non dom, such dividends must be reported to HMRC on an arising basis, which is not really relevant because I remit them to the UK anyway. I've been doing so for about 30 years. I do find it straightforward, although there's only four transactions per year, so easy to keep track of.There are questions about where the trade is based - the servers are in the US but is the OP actually managing those servers or he is being paid for things that take place on those servers. If there is a US trade then there will be US taxation implications but if the trade is UK only then there won't.
You may be able to claim certain expenses but they have to be incurred "wholly and exclusively" for the purposes of that trade.
https://www.gov.uk/hmrc-internal-manuals/business-...
It is your responsibility to pay the relevant tax in the UK and, the US if relevant. It's not a straightforward area.
The OP is, I think, referring to earnings, not dividends, so it's overseas income not dividends. That income should be reported to HMRC via the relevant part of the Foreign Pages of the SA form. If there's no WHT applied in the USA, then it's a matter of the gross amount which will be then added to UK income for UK tax purposes.
As far as conversion from US$ to UK£ is concerned, I assume that potentially there will be lots of remitted transactions and each time there will be a conversion rate applied either before remittance, so by a USA entity, or after remittance, so likely a UK bank. So, it's matter of keeping good records of each remittance transaction, something like this perhaps:
- date of transaction in the USA,
- gross amount in US$,
- date remittance received in the UK,
- gross amount in UK£,
- exchange rate used for the transaction
That's how I think the transactions need to be dealt with etc. I may be wrong!
I assume the OP's USA income is potentially subject to USA tax so should be reported there too.
R.
Non dom no longer exists and in any case as a UK tax resident you are taxed on your worldwide income (subject to double tax relief where applicable).
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