Crowd funding: Tax?

[LOOK Creative]

If I used a site like Kickstarter or Indiegogo and got the financial support I would require for a project I have in mind. Would I have to pay tax on the funds given. I'm assuming yes, but I thought I'd double check.

 

[mhall]

Strange question

You pay tax on profits, and pay interest on loans

 

[LOOK Creative]

If people are donating funds to help finance a project, is that a profit? Its not a loan as they wouldn't expect it back.

http://www.kickstarter.com/

 

[Talay]

Is he referring to stamp duty on shares given over for cash injections received ?

 

[Scalloway]

According to this article money from Kickstarter is taxable. You may also be liable for VAT if your income exceeds £77,000.

http://www.forbes.com/sites/suwcharmananderson/2012/05/23/kickstarters-sting-in-the-tail-tax/

 

[LOOK Creative]

Lol, I dont think we'll make over £77,000, we'll be lucky to make anything but you have to put down an amount you would like to reach, and I would have to take into consideration tax deductions.

 

[crphillips]

The reward based Crowdfunding like Kickstarter would be taxable. If your obtaining the money for setting up costs then simply make sure you spend it all on setting up. If you spend it all you'll have no profit and therefore no tax to pay.

With the equity based crowd funding such as Crowdcube the money injected into the business is treated like an investment and is therefore not liable to tax.