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At what point am I calculating profits? (UK tax resident)


lizc_writes
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I do apologise if this has been asked before - I’ve been searching Google for a while, but can’t find a definitive answer. I’m looking into my taxes and am wondering at what point I calculate my profits.

I know that the 20% I don’t include as I never see it in any of my accounts, however, once my earnings are moved out of Fiverr to my bank account or Paypal, there are further reductions (fees).

Do I take those reductions into account, and calculate my profit based on what appears in my Paypal / Bank account? Or do I calculate my profit based on what was in my Fiverr originally, and include transaction fees in my business expenses? OR, do I just need to eat up the transaction fees with no tax relief?

Any help appreciated 🙂

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I do apologise if this has been asked before - I’ve been searching Google for a while, but can’t find a definitive answer. I’m looking into my taxes and am wondering at what point I calculate my profits.

I know that the 20% I don’t include as I never see it in any of my accounts, however, once my earnings are moved out of Fiverr to my bank account or Paypal, there are further reductions (fees).

Do I take those reductions into account, and calculate my profit based on what appears in my Paypal / Bank account? Or do I calculate my profit based on what was in my Fiverr originally, and include transaction fees in my business expenses? OR, do I just need to eat up the transaction fees with no tax relief?

Any help appreciated 🙂

calculate my profit based on what appears in my Paypal / Bank account?

That is the answer. For anything more detailed suggest you contact your accountant.

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I do apologise if this has been asked before - I’ve been searching Google for a while, but can’t find a definitive answer. I’m looking into my taxes and am wondering at what point I calculate my profits.

I know that the 20% I don’t include as I never see it in any of my accounts, however, once my earnings are moved out of Fiverr to my bank account or Paypal, there are further reductions (fees).

Do I take those reductions into account, and calculate my profit based on what appears in my Paypal / Bank account? Or do I calculate my profit based on what was in my Fiverr originally, and include transaction fees in my business expenses? OR, do I just need to eat up the transaction fees with no tax relief?

Any help appreciated 🙂

calculate my profit based on what appears in my Paypal / Bank account?

Yes, this. You can only count a profit as what you actually get paid. Any fees you paid to fiverr or Paypal are not profit and you shouldn’t count that as such.

If you had first received it all without fees being first deducted, only then would you be able to count those as deductions from your profit.

Paypal doesn’t charge us fiverr sellers any fees now.

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