Is Paypal fee tax deductible?

[LOOK Creative]

Is Paypal fee tax deductible? Does it come under business expenditure?

http://freelanceswitch.com/the-business-of-freelancing/10-deductions-freelancers-can-grab/

 

[OldWelshGuy]

Yes, you should declare your income as the full amount invoiced, and the PP fees as a cost . otherwise you are under declaring your revenue

 

[LOOK Creative]

I meant, when you are doing your tax return, yes you put in your full invoiced amount, but when filling out expenditures, can PayPal be used as a business expense

 

[internetspaceships]

I meant, when you are doing your tax return, yes you put in your full invoiced amount, but when filling out expenditures, can PayPal be used as a business expense

Yes that's what OWG just said to you.

 

[smo]

Its a legitimate business cost which is entered into your books.

If you are talking about a personal tax return and thinking of it as an expense such as claiming fuel or a hotel stay on a business trip then no, its no an expense.

 

[internetspaceships]

Its a legitimate business cost which is entered into your books.

If you are talking about a personal tax return and thinking of it as an expense such as claiming fuel or a hotel stay on a business trip then no, its no an expense.

Great, that just cleared things up. Not.

 

[LOOK Creative]

lol, I hate do tax returns. Do you put in the full amount. Most of my customers pay by paypal and I just printed off a PDF for April 5th 11 to April 4th 12 and the fee's I've paid is over £1000. Do I put that all in?

 

[lynxus]

lol, I hate do tax returns. Do you put in the full amount. Most of my customers pay by paypal and I just printed off a PDF for April 5th 11 to April 4th 12 and the fee's I've paid is over £1000. Do I put that all in?

yep..

paypal fees are just like any other cost you would put against your profits.

 

[LOOK Creative]

When does your 2001/2012 tax return have to be submitted by?

 

[LOOK Creative]

2011/2012 I meant.

 

[Scalloway]

31 October on paper,31 January 2013 online

 

[LOOK Creative]

Thanks. I got to get mine done now for the tax credits

 

[Scalloway]

You can do an estimate for tax credits and give them the correct figure later (before 31 Jan).

 

[smo]

Great, that just cleared things up. Not.

Seems perfectly clear, not sure what the issue is :| There is a big different between what you put on your business return (CT600) and a personal tax return and how things are written down.

 

[David Griffiths]

Seems perfectly clear, not sure what the issue is :| There is a big different between what you put on your business return (CT600) and a personal tax return and how things are written down.

But sole traders don't complete CT600s. All of the trading information goes on their personal tax returns.

CT600s are only for companies

That's why your original posting on the matter didn't make a great deal of sense

 

[MyAccountantOnline]

When does your 2001/2012 tax return have to be submitted by?

To add to the reply you had to this question you may find this helpful.

 

[smo]

But sole traders don't complete CT600s. All of the trading information goes on their personal tax returns.

CT600s are only for companies

That's why your original posting on the matter didn't make a great deal of sense

Unless I missed it he doesnt say he is a sole trader and the link in the opening post is for an american website referencing the IRS....hardly of use at all!

 

[tonytreacy]

Absolutely. All charges, fees, costs etc which are wholly incurred when running your business are tax deductible.

 

[mark7144]

Last year I only declared the money that actually hit the Paypal account, not the fees which were taken before the money was received.

Should I be worried?

 

[Mr D]

Yes.
Next time print a monthly statement from PayPal, it shows amount paid by buyers and amount you put as fees in your expenses.

If hmrc ever look at what you are declaring and what PayPal declare you received there will be a discrepancy if you under report it.
For larger turnover you also risk VAT fraud.

 

[Scalloway]

Your turnover for VAT is based on your gross turnover so Mr D is correct. If you under report your turnover you may unwittingly cross the VAT registration limit and get hit with penalties when HMRC find out.

 

[effie9]

Thank you for this thread. Really useful!

 

[mark7144]

What can I do about my previous self-assessment? Is it worth contacting HRMC somehow to correct this? It was only a £300 though.

I am doing my current self-assessment now which is several thousand and will make sure to do it correctly. By the way, I don't think VAT is applicable for the online services I sell.

 

[Scalloway]

For £300 I wouldn't bother. What kind of digital services do you provide?

 

[mark7144]

Thank you. I essentially run an online market place and my income is a share of those transactions.

 

[Scalloway]

Are your customers EU based?

 

[mark7144]

Almost entirely from U.S. and that money is received into my Paypal business account.

 

[webgeek]

I always entered Paypal charges in the same line as banking fees. That's what it is, a currency conversion charge or financial service charge.

 

[Webzsuite.com]

Yes, it is a declarable fee.

Same as you would accept payment using a credit card or bank transfer. You always declare the invoiced amount and then add any fees to your costs.

 

[STDFR33]

Almost entirely from U.S. and that money is received into my Paypal business account.

Might be worth you registering for VAT.