Well I’m sure you’ve all been fascinated with my “other” cybermummy post which is here for those of you who missed my talk.
But I thought I’d better write a post of what I gained from the day
- I learnt that after spending the last 18 months in the company of babies my ability for public speaking has vanished and for those who did attend my session I can only apologise if it was complete waffle. But hopefully my post on the subject will more than make up for it. I also realise that I said “in the eyes of HMRC” rather a lot, if anyone kept count could you please let me know how many times I said it!
- I was lucky to meet Sarah Brown and her talk was very inspirational and it was lovely to meet her afterwards and get my book signed by her. My husband teaches politics and he is proudly telling everyone that his wife has spoke at the same conference as Sarah Brown lol. I imagine our signed book will be proudly shown to all his future politics classes.
- I learnt that I really can’t function without a constant supply of caffeine. When at home I must drink about 100 cups of tea a day and I found the caffeine restrictions at Cybermummy quite a challenge! It would have been lovely to have been able to get tea and coffee inbetween the specified coffee breaks.
- I met some wonderful people, some who I already follow and some who have never crossed my radar before. The conversations we had were hysterical and it was lovely to put faces to names at last. My blogroll will be growing considerably after this (though it will take me a few weeks to go through all the business cards and remember everyone)
- Whereas some people look exactly like their avatars, a lot of people were very hard to recognise and I was constantly grabbing peoples lanyards to see who they were. After the first hour I lost all embarrassment about doing this and so if you were approached by the tall blonde who grabbed your badge and said “so who are you?” then it was probably me
- A few bloggers seem to believe in their own self importance and if you blog is not ranked in the top 10 then you aren’t worth speaking too! I’m not naming names but there were some who I thought came across as very nice on twitter and their blogs but I was sadly disappointed in real life.
- I learnt that I’m not actually that bothered about not being a “top 100″ blog, you see it became apparent that a lot of people know me and read my blog. At the end of the day what really matters is that I enjoy blogging and sharing my life with people. Yes I love reviewing items and I will accept the occasional advertisement but being at Cybermummy reinforced by views that I will always carefully consider what items I review and what advertisements I accept and that sponsored posts just aren’t what my readers want to see. In reality I have turned down more PR requests than I have accepted this month because I don’t want my blog to be too cluttered and irrelevant to my readers. Basically I’m not going to sell my soul in order to get products (though I will consider selling my baby in exchange for a LeapPad (see below) )
- That despite all the goody bags, somebody should really have chucked some tissues in one of them or at least placed a box of tissues on each table as they were definitely required for the key note sessions.
- I discovered that some of the PR people really should get a personality transplant! However others were lovely and I’d liked to have spent more time chatting to them instead of rushing around getting a passport signed.
- My favourite product of the day (and no I’ve not been paid to say this) was definitely the Leapfrog LeapPad. I can’t wait for them to be launched as I’m desperate to get my hands on one for MissB! I know the age range is age 4-9 but I figure if my 18 month old is capable of using my Iphone she can certainly handle a LeapPad So if any PRs from Leapfrog happen to be reading this then pretty pretty please can I review one for you
- I loved having a chance to get my hair and makeup done in the P&G recharge room. Having 2 kids under 18 months I seldom get time to sit down and be pampered so it was a real pleasure.It was also lovely to get my toesnails done and get a lovely pair of crocs to wear
- I really should have kidnapped Sian To and stolen one of the Hyundai cars and zoomed up the M1 to York to gatecrash the Morrissey gig
- Cybermummy missed a trick, they should have got a luggage sponsor to provide us with huge pink holdalls on wheels for us all to take our goodies home in!
I could go on forever but I will leave it at that for now Overall I had a wonderful weekend in London with my sister Mummy Loves and I will definitely be queuing up to buy tickets for Cybermummy12!
Following my talk at Cybermummy11 I have put together the following guide to blogging and tax. Apologies if you attended my talk and it was complete waffle but it would have been impossible to fit all this information into my timeslot and it would have no doubt bored you all senseless!
Please bear in mind that tax is a huge area and that it also depends on any other income you may have etc and so this guide is a general guide and if you have any concerns relating to your personal taxation situation then you should really speak to an accountant or tax adviser.
So make sure you are prepared with a big mug of tea and biscuits and we shall begin Any questions on anything, just leave me a comment and I’ll answer it for you this week.
Do I need to pay tax?
The short answer to this is YES! If you are making any money from your blog then you need to start considering whether there is tax to pay. There is very little income in the UK that is not taxable – you can see a full list of this here on the HMRC website:
Everybody has a personal allowance but once this has been exceeded then any other income not on that list is then subject to income tax.
Hobby or Business?
The first step in figuring out how and how much tax you have to pay is working out whether your blog is a hobby or a business. Now you may consider that your blog is just your hobby but the way that HMRC views it could be different. HMRC looks for something called “Badges of Trade” in order to assess whether you are operating as a business or not. The full list of them is here:
The main thing that you really need to consider from all that is whether you are intending to make a profit from your blog (even though you may not actually be making one at present), if you are regularly doing business like transactions (ie charging for advertisements) and how the transactions are carried out. If you are unsure as to whether you should register your blog as a business then you should speak to an accountant or tax adviser.
I think I would be classed as a hobby even though occasionally I make a small income from my blog?
If you don’t meet any of the badges of trade about and feel that HMRC would class your blog as a hobby then you will still need to pay tax on any income you occasionally make through it. You won’t need to register for self assessment if you are already paying tax through PAYE, if the income is up to £2500 you can contact HMRC and ask them to adjust your PAYE code so that any extra tax will be deducted through your employer. This link basically tells you what you need to know about contacting them to do this.
Remember you can still deduct the costs of running your blog from any income you receive but whereas with a business if you make a loss you could offset it against other income, with hobby income (ie casual earnings) you can’t use losses to carry forward or set against other income.
OK so I think HMRC would view my blog as a business, what should I do now?
The first thing you will need to do is register with HMRC for self assessment, this should be done within 3 months of starting your business. The latest you can register for self assessment is the 5th October in the year following the tax year, so if your blog earned you income between 6th April 2010 and 5th April 2011 you will need to make sure you are registered for self assessment by 5th October 2011!
So how much tax will I have to pay?
If you run your blog as a business then you will need to pay Class 2 National Insurance payments of £2.50* per week although you can apply for a Small Earnings Exemption certificate if your earnings are less than £5,315* per year. You will also be liable to pay Class 4 National Insurance contributions of 9%* on any profits between £7,225* and £42,475* per year and you pay 2%* on any profits over that.
Income tax is payable on any profits from the blog whether it is classed as a business or a hobby. Everybody is entitled to a personal “tax free” allowance of £7,475* and if your profits plus any other taxable income you receive do not exceed this then no income tax would be payable. Any profits over this are subject to tax of 20%* up to £37,400* and 40%* up to £150k* and 50% over £150k*.
*rates used are for the tax year 2011/12
What kind of income is classed as taxable?
Here are a few common types of income you may get from your blog:
- Sponsored posts
- Affiliate sales – where you get a % for sales made through a link from your blog
- Payments in Kind – ie if you are given a product in exchange for an advertisement on your blog. For this you should record a fair market value, this could be the lower of either the usual rate you charge for an advertisement on your blog or the market value of the product you received.
What isn’t taxable are:
- Goody bags you receive from PR events, if you are not expected to do anything in return for them then they can be classed as gifts
- Days out or being entertained by PR/Companies. Again as long as there are no “terms and conditions” relating to the day out then it is classed as you are being entertained and you will not need to pay tax relating to this.
- Items received for review – this is a bit of a grey area but as long as you are going to use the item for personal use and just post your personal opinion of the product on your blog then you won’t need to pay tax on it. However if you acquire the products with the intention of selling them on, then they will be taxable!
So what expenses can I claim to deduct against this income?
The full list of allowable business expenses can be found here on the HMRC website:
Basically an expense is allowable if it was reasonably incurred and wholly and exclusively incurred for the purpose of the business. Although there are some expenses which are not deductible for tax purposes.
Tax allowable examples include:
- Web hosting fees
- Domain Registration
- Marketing costs such as advertising your blog, business cards etc
- Attending conferences to promote your blog – ie the cost of attending Cybermummy
- A proportion of your broadband costs (you would need to apportion this between private and business use)
- Heating and Lighting – BUT rules apply to this (see below)
What about Heating, Lighting, Home Office costs?
Certain costs can be claimed for using your home as your office if your blog is classed as a business. Full guidance on what you can and cannot claim can be found here:
You can alternatively claim a weekly allowance, the HMRC would not query a £2/£3 weekly charge for home office use being put through as an expense.
Expenses which are not tax deductible include:
- Capital items such as laptops, hard drives etc, capital allowances can be claimed on these so see further down for details about this.
- Entertaining – if you take a PR/Company out for lunch/dinner and pay for it yourself you will not be able to claim this against tax as entertaining is not allowable!
- Any private portion of expenses claimed (ie if you use your broadband 50% of the time for business and 50% of the time for personal use then only 50% can be claimed).
If you run your blog as a business then any capital assets you buy for it such as hard drives, laptops etc can be used to claim capital allowances. The most relevant capital allowance that you could claim would be the AIA (Annual Investment Allowance). Until April 2012 you can basically spent up to £100k on assets for your business (not cars or buildings) and claim 100% of the cost as a capital allowance which will reduce your taxable profits, from April 2012 this will drop to £25k. If you buy a laptop which you are going to also use for personal use then you can only claim a capital allowance for the business proportion of use!
Right, I know what I can claim as income and expenses, how should I record it?
The main thing you should so whether your blog is a hobby or a business is keep all your receipts!! I personally find the simplest way is to have a big brown envelope and keep putting them in there whenever I incur a business expense.
If you then log all the income/expenses in a spreadsheet this will make completing your self assessment much easier, I’d recommend a different tab for income, expenses and capital items.
It is important to keep all these records for a minimum of 6 years!
How do I complete my self assessment?
The simplest way of completing a self assessment is by doing it online (or getting an accountant to do it for you ) There is however plenty of guidance on the HMRC website here:
I could spend hours telling you which boxes you need to fill in etc but it would a) take far too long and b) I do run a business so I can’t keep giving away my services for free all the time If you do want me to do your self assessment for you and you have no other income aside from PAYE then I can offer a HUGE discount on my normal self assessment fees for you PROVIDING you can get everything to me before 1st December! December and January are by far my busiest months and so unfortunately I can’t offer a discount if you ask me to do your self assessment then
When would I have to pay any tax?
Tax for the tax year 2010/11 (6th April 2010 – 5th April 2011) will be payable by 31st January 2012 (the deadline for filing self assessments online and paying any tax due). When you pay this tax you will also notice that they will also add on a 50% prepayment for next years tax bill. This is because when you are paying tax through self assessment on a regular basis the payments go something like this (sorry if this gets a bit confusing but it’s very hard to simplify).
Lets say you have tax of £1000 to pay for tax year 2010/11 and £1500 to pay for tax year 2011/12
On 31/1/12 you will submit your tax return for 2010/11 and pay the £1000 tax but you will also pay a 50% payment towards your 2011/12 bill based on the 2010/11 bill (£500) so total payable will be £1500.
On 31/7/12 you will pay your second payment on account towards your 2011/12 tax bill (ie £500)
On 31/1/13 you will pay any balancing amount on your 2011/12 tax bill and 50% payment on account towards next years tax bill. So if the tax bill is £1500, you have already paid £500 on 31/1/12 and £500 on 31/7/12 and so you will need to pay the remaining £500 plus 50% payment on account of £750 so total payable would be £1250.
There is more about payment of tax here:
Other things you need to consider relating to income and blogging!
- If you are claiming child tax credits or working tax credits (or other benefits directly related to your income) then you will also need to include extra income from your blog on your tax credit renewal form. You only currently need to declare extra income over £300 (that is total extra income not just your blog income) and so if your total extra income does not exceed £300 then you need not declare it, if it does then you only need to declare the amount over £300 (ie if your extra income is £500 then you would only declare £200 on your tax credit renewal form). The Tax Credit Office may charge you a penalty if they find that you have supplied incorrect information in your claim. But they’ll contact you to tell you – they never give automatic penalties.
- Anything you win in competitions from other blogs etc is not taxable.
VAT and Limited Companies
The current limit where you would have to register for VAT is £73,000 turnover in a year, for the purposes of this post I’m assuming most of your blogs don’t generate this and so I will skim over the subject. You can of course voluntarily register for VAT before you reach this level of turnover if you feel it will benefit you! More information can be found here for those interested:
There is the option of setting up your blog as a Limited Company if you feel this is of benefit to you although the accounting costs do increase and there is more paperwork involved. I’m not going to go into this now but if it is something you want more information on it can be found here:
Disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet and the information above is general information only and should not be relied upon solely, if you have any queries about your tax position then you should speak to an Accountant or Tax Advisor to discuss your specific circumstances.
As you all know by now I’ll be attending Cybermummy this year with thanks to my lovely sponsor BWebsites
Well a little bit of exciting news (or rather terrifying news if you are in my shoes ) is that I have been asked to speak to you all about the tax implications of blogging. So this year, for a short time only I will be putting on my accountants hat and answering your questions on tax.
Here is your chance to get any questions that you have about tax answering. If you leave your question as a comment below I will try and include it in my talk but if I don’t manage to include it I will be answering all the questions on my blog after the event. Please bear in mind that I can’t answer too specific questions relating to your own personal circumstances as in order to do that I will need a lot more information from you, but I can answer any general questions such as “If I receive a goody bag do I need to declare it?” or “how do I declare my income?”
You’ll find me on the day between 12:15 – 13:10 in Morning Session II, CyberLab – Keeping your blog legal (CyberMummy 2). I look forward to seeing you there
I’ve just been looking back through my blog and I’ve realised that a couple of days ago was my blogiversary. I’ve been so busy the last few weeks the date passed me by but on 4th June 2010 I started this little blog
Since then I have written 160 posts and have shared many highs and lows with you all. I’ve had the opportunity to review some great products and I’ve met some lovely friends. You’ve witnessed the trials of my second pregnancy, the birth of MasterB and MissB growing up and starting to walk.
There is always a lot of issues during the first week of the month when various statistics are released but I have to say that I’m happy that I’m not necessarily a “top rated” blog, you see I don’t blog for money or products (although I have received some lovely ones). I blog because I get lonely like a lot of mums who work from home and I want to make contact with the outside world. I blog because I like sharing my family and life with people and I blog because I like the blogging community and I want to be part of it. My stats are increasing all the time and as much as it makes me happy to see so many people reading my blog on a daily basis I’m quite happy to just keep blogging and see where it takes me
With my first Cybermummy in just a couple of weeks I can’t wait to meet many of my fellow bloggers who I have come into contact with in the last year, when we share our lives on our blogs it feels like I know many of you and your children already
And just in case you missed my first ever blog post it was this one:
And finally a big thank you to all my followers, subscribers and commenters over the last year, you have made my first year blogging a lovely experience.
Carly over at MummysShoes Blog is hosting a Cybermummy meet and greet and seeing as the date is fast approaching I thought I’d better get round to introducing myself
I’m attending Cybermummy this year thanks to my lovely sponsor B Websites so please pop across to their website and see if they can help you
Name: Dawn Brown (or Dawnie)
Blog: Knees Up Mother Brown
Twitter ID: @Dawnie_Brown
Height: 5ft 10inches
Hair: Long Blonde (with a little bit of help from my hairdresser )
Likes: Sleep, Chocolate, Sleep, Vegetarian Food, Sleep, Horses, Sleep, Twitter, Sleep, Pretty things and oh did I mention Sleep?
Dislikes: Lack of sleep, being cold, bitchy people, the current state of my nails,
I’m really looking forward to attending Cybermummy 11 this year and this is helped greatly by my having found a lovely sponsor – B Websites.
B Websites is a reputable and well established Surrey based company. It began in 2004 and has a large portfolio of over 200 live websites all managed by a highly committed and talented team. As digital online experts they plan, design, build and promote websites, online shops, blogs and web applications that help their clients win new business. They have strong and trusted relationships with their clients, many of whom have been with them for a number of years as they help them further grow and develop their online presence. And 60% of their business comes via referrals and repeat orders.
Just a few of the services B Websites offers are:
Check out their website to see what other services they offer that may be of use to you!
You can find Zoe Brown (Managing Director of B Websites and busy mum of 5!!!) over on twitter @BWebsites