I'm registered as self employed and I now want to start a blog where I can use adverts and amazon to make a little extra cash. Now I know that I have to record anything I earn as an income but I have no idea how or when to record the details.

As all the things that I'm planning on using are online based and have a "minimum payout" I'm unsure of exactly when to class it as an income - Do I only record what I transfer to my bank account or the actual affiliate balance?

Also, how often do I record my income? I mean it's not too bad when you earn by the product sold but with Google Adsense and similar things you have a daily income based on number of visits so do you keep a daily record or is weekly or even monthly OK?

Does anyone here have experience with this or are there any online resourses to help with these questions?

  • Out of interest, how do you record the 'proof' of these payments, seeing as Amazon doesn't generate invoices/receipts for us to download in the way that, for example, Affiliate Window does? – James Jan 22 '15 at 22:15

Every bill you write counts as income (if the bill doesn't get paid, you would count that as an expense). In cases where you don't write bills, I think the payment you receive would count as income, but you might check that on the HMRC website. So to record your income, you can basically record the payments that you receive.

Anything you pay out for your business is an expense. You keep a receipt for every expense - if you don't have a receipt, you can't count it as an expense, so keeping all the receipts is very, very important. An exception are investments, for example buying a computer that should last multiple years; there you can count a percentage of the investment as expense every year.

All income, minus all expenses, is your profit. You pay tax and National Insurance contributions according to your profit. You can do whatever you like with the profit.

Notice that I didn't mention any salary. Self employed means you have no salary, you have profits and do with them whatever you like. On the other hand, you pay taxes on these profits almost exactly as if they were income.

If you have this blog but are also employed, you'll add the profits to your normal income statement.

  • Thanks for your reply. I guess the real question I have is actually when to class an income as income - I mean do I only class it as income once the money enters my bank account or when it enters my online adsense account (Which I hope would be daily)? – user3177012 Sep 26 '14 at 13:00

Adsense don't pay you daily. They pay you every month (as they have to calculate the final value).

I'd say you only have to declare it when it hits your bank account. £60 actually isn't that much. It only took me a couple of months of just making a few quid, to making enough to get a monthly payment, and I only tot up what goes into my bank account.

I've opened up a second account with my bank to send and receive payments relating to my online adventures. Then any in/out goes into a spreadsheet that I do at the end of the month keeping track of everything. If Mr. Taxman want to investigate at the end of the tax year, it's all logged in that account.

It gets a bit murkier if you start doing US Amazon affiliates. The simplest method is to get the cheque delivered, and then log the amount that goes into your bank (after $->£ conversion). I have a Payoneer account, and transfer most of the money into my account (after it hits $500), and keep a little bit in for things I buy that are in USD.

Hope that helps.

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