Tax and National Insurance
So i'm developing applications from the United Kingdom, been selling apps since November 2011, and ive only just thought, hang on, do i need to do anything about tax and national insurance?
Questions:
Tax:
I can see tax information under Itunes connect, so am i assume to Apple is taking care of all relevant tax information/documentation? For example is the tax is taken out of the 30% that apple takes from the app sales? Because i calculated how much i should earn, taking into consideration i earn 70% of app sales, and upon my first payment from apple, it matched my calculation which showed no extra fee/costs such as tax had been deducted from the figure, only the 30% reduction from which apple takes.
National Insurance:
I have been informed anybody who is employed, pays national insurance, which the employer sorts out and automatically deducts from your wages, however, being a freelance iOS developer, are we technically employed? as apple is our agent i'd imagine... apparently we have to set it up and pay it ourselves otherwise could get into some major trouble?
I just need to find this info out a.s.a.p so i can take the appropriate action as i really dont wanna find out ive done something wrong or possibly even illegal and get slapped with a big fine.
Thanks
Questions:
Tax:
I can see tax information under Itunes connect, so am i assume to Apple is taking care of all relevant tax information/documentation? For example is the tax is taken out of the 30% that apple takes from the app sales? Because i calculated how much i should earn, taking into consideration i earn 70% of app sales, and upon my first payment from apple, it matched my calculation which showed no extra fee/costs such as tax had been deducted from the figure, only the 30% reduction from which apple takes.
National Insurance:
I have been informed anybody who is employed, pays national insurance, which the employer sorts out and automatically deducts from your wages, however, being a freelance iOS developer, are we technically employed? as apple is our agent i'd imagine... apparently we have to set it up and pay it ourselves otherwise could get into some major trouble?
I just need to find this info out a.s.a.p so i can take the appropriate action as i really dont wanna find out ive done something wrong or possibly even illegal and get slapped with a big fine.
Thanks
Comments
If you are selling games then you should really be classed as 'self employed' and you get assigned a UTR code from inland revenue/hmrc. The tax Apple take is their tax from offering a service - it has nothing to do with your income and therefore the (income) tax you pay the uk tax office on your earnings.
Even if you have another job then as you are making money from the games you should declare it. If games dev is your only job then you must be self employed or registered as a company.
If self employed....
You should pay NI at the self employed rate which is roughly £14 a week. You will need to keep records of turnover (sales from apps), the amount you got from Apple after they have taken their cut (net turnover), wages you paid yourself (gross income), tax you pay on that income (tax) leaving how much you actually earned (net income).
Read up on it - tbh you should have done this first because the fines can be £1000 or so. You say you are Freelance iOS developer so make sure legally that you are in fact that !
http://www.hmrc.gov.uk/sa/register.htm