Tax Returns for Streamers

Sep 18, 2019Streamers, Tax

Many streamers start off as a hobby, often born from dreams to share a love of gaming with others.

But what happens when that hobby becomes a side-income and grows into something beyond? When do you have to declare your income? Pay tax? What about the compliance and paperwork?

Ocelot is here to help with all of that, no matter how new of a streamer you are.

When does a Streamer need to submit a Tax Return?

First of all, total revenue earned is the key thing to consider here, so when looking at your income you’ll need to sum up earnings from all sources, this would include Twitch, YouTube, Patreon, Paypal Donations, Merch etc.

Second, you’ll need to keep in mind that each tax year runs from 6th April to 5th April (12-month period). With these two fundamentals to hand we can start to look into whether you’ll require a tax return for that particular year or not!

Over £1,000 in Earnings.

If you’ve earned over £1,000 in the past 12 months, there’s a legal requirement to register as self-employed in order to declare your earnings to HMRC. You can claim back allowable expenditure against this income, with the net amount (your profit) being subject to tax. The UK tax system is particularly complex when it comes to such matters, as you’ll need to take into account any other employment and taxes paid – this is where we come into play!

With Ocelot completing your tax affairs we can typically help you save more tax, than what we cost in fees! This is down to our experience and knowledge of the expenses you can claim to reduce your tax bills.

In the ideal scenario we can reduce your tax liability to a minimum, or even generate a tax refund for you!

If you’re earning over £1,000 a year through streaming, get in contact with us today, as it’s very likely we can reduce your tax bill.

Under £1,000 in Earnings.

If you expect to earn less than £1,000 over the year – likely to be the case if you’re just starting out – then there is good news for you. You’re not legally obliged to register as self-employed!

However, you may still want to consider submitting tax returns for potential tax refunds.

HMRC allow for losses to be relieved against other forms of income, subject to certain accounting principles. On assumption that most new streamers can claim heavy expenses in their first year, it is assumed that you’ll likely be running a loss of say £2,000 – £5,000. If you have other employment and pay taxes, this could result in a tax refund of £400 – £1,000.

These can be ongoing refunds each year a loss is incurred. Lovely!

Already Registered as Self-Employed?

Perhaps you’re already familiar with the above two scenarios and are having a whale of time growing your streaming hobby into a full-time income stream – kudos to you if so!

You may well be ready to go the next step and setup as a Limited Company, with tax benefits being even greater. Once you reach this level the sky really is the limit with how much tax you can save. This area is a specialist field which we are passionate about, so make sure you fire any questions our way for free advice.

Please get in contact with us today should you want to discuss your situation further. Even if you’ve just started out, it’s best to plan ahead.

We don’t just cater for gamers and streamers, check out our ‘Who We Help‘ page for more detail.

by Max McHugh

by Max McHugh

FMAAT, CIMA Dip MA

Founder & Director | Xero Certified Advisor

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