Gifts vs. payments from clients - what should I not be paying tax on? (UK)

[Sashacurves]

I recently had a lightbulb moment where I realised that many of the payments I've been sent on my CashApp from clients may not actually be taxable and I may therefore unnecessarily be paying too much tax!

Obviously where a payment is for a service such as a Skype call/custom video/physical product then it's clearly taxable. But, it's so difficult to find information on other payments in UK tax law - I don't have an accountant so can anyone who does or has experience please help me out here?

For example, I receive payments for things like:
-just buying myself "something nice" (sugar daddy vibes)
-as a prompt to check my messages and reply to them on a different platform
-just for the sake of it to cheer me up if I've had a bad day or help me cover a cost that they know I've spent but never asked them for the money
-paying me higher than my asking rate for my services - e.g. on Skype I charge a set per-minute rate but some customers prefer to pay what they deem to be an appropriate rate, so is the extra considered taxable or not?
(none of these things are solicited by me)

Is there any kind of threshold rule like "only £1000/year from any one person can be considered a gift, any more than that is taxable" or something?

Any advice appreciated - not trying to get out of paying tax but don't want to be paying anything I don't have to!

 

[KingMarti]

I recently had a lightbulb moment where I realised that many of the payments I've been sent on my CashApp from clients may not actually be taxable and I may therefore unnecessarily be paying too much tax!

Obviously where a payment is for a service such as a Skype call/custom video/physical product then it's clearly taxable. But, it's so difficult to find information on other payments in UK tax law - I don't have an accountant so can anyone who does or has experience please help me out here?

For example, I receive payments for things like:
-just buying myself "something nice" (sugar daddy vibes)
-as a prompt to check my messages and reply to them on a different platform
-just for the sake of it to cheer me up if I've had a bad day or help me cover a cost that they know I've spent but never asked them for the money
-paying me higher than my asking rate for my services - e.g. on Skype I charge a set per-minute rate but some customers prefer to pay what they deem to be an appropriate rate, so is the extra considered taxable or not?
(none of these things are solicited by me)

Is there any kind of threshold rule like "only £1000/year from any one person can be considered a gift, any more than that is taxable" or something?

Any advice appreciated - not trying to get out of paying tax but don't want to be paying anything I don't have to!

I would think it would all be classed as income (also not an accountant). The reason I think this is because they are paying you through your buisness persona so I would class it as a business transaction. Maybe look into how tips for service workers are ment to be taxed, I would say that a payment with no service would be akin to that kind of tip, but I always found if something makes sense then its more than likely the opposite that's true when it comes to uk regulations.

I would recommend getting an accountant though, a good accountant should be able to save you more in write offs than what they cost you, cant give any specific recommendations for accountants to try though, it's been a long time since I was in the uk.

 

[Sashacurves]

I would think it would all be classed as income (also not an accountant). The reason I think this is because they are paying you through your buisness persona so I would class it as a business transaction. Maybe look into how tips for service workers are ment to be taxed, I would say that a payment with no service would be akin to that kind of tip, but I always found if something makes sense then its more than likely the opposite that's true when it comes to uk regulations.

I would recommend getting an accountant though, a good accountant should be able to save you more in write offs than what they cost you, cant give any specific recommendations for accountants to try though, it's been a long time since I was in the uk.

Ah that's a very good point likening it to tips in hospitality jobs actually. Damn, thought I was on to something, oh well haha.

I think I will have to get an accountant this year you're right, and it's better safe than sorry if I'm doing anything wrong I don't want to get fined or something if I'm audited!

 

[KingMarti]

Ah that's a very good point likening it to tips in hospitality jobs actually. Damn, thought I was on to something, oh well haha.

I think I will have to get an accountant this year you're right, and it's better safe than sorry if I'm doing anything wrong I don't want to get fined or something if I'm audited!

To be clear on that point though, I have 0 idea if tips are classed as income, I would assume so because its income, but it's also technically a gift so no idea. Most tips are cash though (although when I left the uk they started adding the option to tip onto the payment terminals, there was a thing with pizza huts near where I was living and they were setting the payment terminal up for giving 100% tips knowing that no one really pays attention to whats displayed on the screen, so they just tap to pay and end up getting charged double).

 

[Sashacurves]

I'm pretty sure you do have to pay tax on tips yeah and that's why people always prefer cash tips so they can get away with not having to report it! I actually worked for pizza hut and used to get people complaining about that haha