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I am pondering putting video up on youtube with monetization (i.e. putting up adverts), or stream on twitch. However, I would like to know what the tax consequences are. I assume the income is taxable, but I would also like to know if I would need to register as self-employed, and when I would have to register, if so. E.g. could I wait until I am likely to get any money?

I have looked at the HMRC website, but the main guidance about being self-employed or not seems to be about whether you are self-employed, or an employee, not whether you are self-employed or not employed.

Assume here I am not going to employee anyone else, have no or minimal additional costs (I would use my own computer, for example). It seems that if you set up a full video production house, you would be self-employed, but is there a minimum standard for you to be self-employed, so that if you are just putting up videos of your hobby it wouldn't be?

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The HMRC has a dedicated self-help/learning site that is helpful here:

It's important to tell HMRC that you are self-employed as soon as possible.

If you don't, you may have to pay a penalty.

You don't want to pay more to HMRC than you have to as it is a waste of your money.

Your business has started when you start to advertise or you have a customer to buy your goods or services.

It is at this point that your business is 'trading'. You cannot register before you start trading.

For example, if you advertise your business in the local newspaper on 15 January but do not get your first customer until 29 March; in this case, you have been trading since 15 January.

You must tell HMRC within six months of the end of the tax year in which you start self-employment.

You must therefore register by 5 October.

But it's best to register well before this so that you do not forget to do so.

The HMRC also has a YouTube channel with help videos, and "Am I Trading or Not?" might be of particular interest to you.

Most of the registration is based around the concept of starting to work with the intent to make a profit. By the letter of law and regulations, you should register within six months of the end of the tax year you started to avoid any potential penalty.

However note that the situation is different based upon your intent. If you begin making/putting up videos online as a hobby with the hope that you can make something to help you defray the basic costs involved, and the total amount you make is relatively small (say, less than 500 pounds), you will not be classified as "trading" and likely have no need to register with HMRC.

As soon as you begin to get in regular payments, maybe a single payment of a significant size, or multiple payments for a similar service/item, you are vastly more likely to need to register.

From my reading you would likely be safe to begin putting up videos without registration, but if you begin spending a large portion of your time over an extended period (multiple months) and/or begin getting payments of any notable size then you should likely register with the appropriate services (HMRC, etc).

As is the case in both the USA and UK, simple registration is pretty cheap and the costs of little/no income are usually pretty minor.

Also note that the HMRC trading and self-employment regulations are unusual compared to many US laws/institutions, in that you are explicitly permitted to begin doing something and only register later. So if you start doing videos for an entire tax year + 5 months and make nothing significant, you'd seemingly be fine to never register at all.

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The difference between a hobby and a business is income. Yes, every country I know of allows you to do something as a hobby until it becomes profitable and then change it into a business once it becomes likely to turn a profit.

There's usually a limit in terms of how much profit or revenue you can make before it must be declared as business. I'm sure someone else will mention the exact numbers for the UK.

  • In multiple states and jurisdictions in the US it is not legal to sell something without appropriate licenses/registration, whether hobby or business. Even if something is technically sold at cost or as a hobby, accepting money in exchange for a good or a service is often classified as a financial/business transaction and is subject to taxation/regulation. Sales taxes, food handling/safety requirements, zoning ordinances, alcohol/tobacco/substance restrictions (home brewing and growing, for instance), etc. A lack of profit or even major income does not indicate legality. – BrianH Jan 5 '15 at 16:34
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Unless your video does very well, it's unlikely that your income from it will exceed your expenses incurred in making it, such as the purchase prices of your computer and video camera and the cost of your broadband connection, so there shouldn't be any tax to pay.

  • I don't think this really answers the question. As I said, I won't be buying a new computer to do this, I would be using a computer I already own, and using a broadband connection I already have, etc. Also this doesn't answer whether I would need to register as self-employed, even if I don't make a profit. – Silverfish Dec 2 '14 at 17:18
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    Even if you already own the computer and have the broadband connection, you can offset at least part of their cost as being for business use if you're using them to generate income. And even part of their cost is likely to exceed the income. As far as I know (but I'm not a tax accountant), HMRC can't penalise you for not registering as self-employed if the amount of tax you should have been paying them is £0. – Mike Scott Dec 2 '14 at 17:22

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