@Harian
Free gamebooks get 5 times the downloads but a hundredth of the revenue, so $400 a year for a free gamebook wouldn’t be too outlandish.
DARN DOUBLE POST.
@Harian Per year, but if you live in the UK then obviously it would be different.
You mean making $400 dollars per annum? Thats like making 33 a month, not enough to decently live on…though it shouldn’t be taxable if its that low.
@Harian Indeed, but this particular law isn’t intended for someone trying to make a living, but rather for someone still in high school and making a little bit of money during the summer or whatever.
Whereas I want to make CoG my full time employment.
And if CoG becomes my job then according to this I’ll start paying taxes if my games start making 10,000 per annum.
@Harian In the UK we’ve different laws than in the US. It is something you’d need to investigate and insure you get all your papers sorted out. (And if you do let me know please since it’s what I’m least looking forward to doing.)
A quick search found http://www.freelancewritinggigs.com/2009/11/tax-for-uk-freelancers/ Which I haven’t read yet so no idea if it’s useful or not.
Would the Citizens Advice Bureau be able to help with answering those sorts of questions? I know they deal with financial matters. They may be able to point you in the right direction.
So, seeing as there are a couple of people asking about the law concerning this in the UK:
@Harian @FairyGodfeather At present, you are entitled to earn up to the sum of £8,105 up to the age of 64 without taxation. The link that Harian provides seems to indicate that you can earn up to £10,000 without paying tax which is not strictly true. This has increased now to £9,440. If you want to read more information on normal, taxable income, visit gov.uk. All of this money which isn’t taxable by the way is referred to as the personal allowance.
So what do you do when you earn above these figures? You may be eligible for certain tax breaks (if you are self-employed, for example) or, specifically for Harian if you’re looking to gain a steady income, you may want to re-invest some of your money into an investment scheme.
When reading this stuff however, take it with a pinch of salt. The advice or information I am giving is generic and not terribly helpful to the individual. Citizens Advice will help you further and more specifically and you may want to speak to a financial advisor of some sort too. If you do have any more questions, I will do my best to answer them for you.
@_jl
Thanks, thats really helpful.
Working on CoG, would that be considered being self-employed? Investment is something I’m only fairly familiar with and I lack experience there and I know it involves quite a bit of risk. A steady income is something what I am to make eventually.
If I go over £9,440 therefore I should be entitled a claim for the appropriate expenses (assuming I’ll be classified as Self-Employed):
Accountancy and professional fees
Cost of goods that you purchase to sell or provide a service
Rent, rates, power and water (business proportion only)
Advertising
Insurance
Logo’d uniform
Business bank, PayPal and credit card charges
Interest on business loans
Wages and salaries paid to staff plus other staff costs
Car, van and travel expenses
Irrecoverable debts
Postage
Stationery, phone and internet costs
Professional journals
Safety wear such as safety helmet
@Harian Again, I can only answer your question as a third party observer so please do not take anything as gospel or sound advice until you’ve verified this with a body like Citizens Advice.
Working on CoG could technically constitute self-employment although you’d have to look at the terms of the contract offered by Choice of Games LLC to really see. Investment can be risky or safe, depending on what your investment scheme is. Being a stock broker or dealing with the bonds market is obviously much more risky than putting your money in an account to generate interest, for example.
The expenses you claim cannot be virtual; you must justify these costs in some way and the Her Majesty’s Revenue and Customs (HM Revenue and Customs) will investigate such claims if they view them as dubious. Much of the claims that you list in and of themselves, just from a cursory look, do seem to fall into the category of necessary expenses. Just to reiterate, this is IF you can justify and/or prove them.
For CoG when I’m working I’ll be using electricity and the internet.
I’m not sure if I would obtain a contract from CoG LLC or not since I’d be publishing under the Hosted Tag for probably quite some time until maybe one day I could work for hire in CoG at their discretion, though until that possibility I’ll be working under Hosted Games, and I’m not certain if there is any employment contract involved behind making games under the ‘Hosted’ tag.
@Harian Regarding CoG specific contractual agreements I won’t speak to because I do not know them either. You may be able to claim expenses for electricity and the internet but the issue which immediately flags up in my mind is whether you’d be using these amenities (which you almost certainly would) for other activities.
If you are working from home, I am not sure how justified your claim would be and this is something you definitely need to take to your local Citizens Advice Bureau to, well, get advice on.
International Tax Treaties come into effect too. I had to get my Certificate of Residency from Canada Revenue and send it in. It determines how much tax they have to withhold and possibly send into the IRS. It’s a US business, so things get a touch more complicated.
@Lucid it doesn’t determine how much tax that has to be withheld. Us having a Certificate of Residency from you means that we’re absolved from withholding tax from you. It means that all tax matters are handled between you and your government, and we pay you the full amount that you earn.
So that means that it entirely determines how much (or rather if) tax is withheld, right?
It determines that no tax is to be withheld by us.
Yay Canada-US Tax Treaty!! 
What about for the UK? Does CoG withhold the relevant tax deducted from your revenue? Or will you have to calculate the tax yourself?
@Harian no. You give us a Certificate of Residency, and we pay you your full earnings. Then you deal with the UK government for taxes; you owe nothing to the US government.
@jasonstevanhill
What would theoretically happen if you had to pay an author who lived in a country which didn’t have a Tax treaty with the US?