Who has to pay tax?

**intothewild** · 25-08-09

Me and a friend, who is studying the same course as me, just created an affiliate site to be operated in Russia on behalf of Russian players.

He is currently living in the U.K, I am a resident of the U.K.

Our site will be medium sized, possibly my main source of income, but be operated completely in Russia and not hosted in the U.K. Programming will be done in Russia, maintanence in Russia, etc.

Am I forced to pay income tax in the UK? What about him, if he moves back to Russia?

Secondly, if I do not claim and get caught what are the repercussions? If I am able to pay back the 33% owed or whatever the amount, will this be ok?

Thanks for any information.

**Mogga** · 25-08-09

HM Revenue & Customs: Self Employed

See there.

Take accountants advice and you will have less tax to pay.

I assume networks declare your earnings to the HMRC if they ask anyway

**Barry** · 25-08-09

You have to pay tax in the country you are a resident in, so yes you will have to pay tax.

What can happen? For major tax fraud you can goto jail, worst case scenario. Best case is that you have to pay it back with interest and fines on top.

There are various ways you could get caught even though its very unlikely that the tax office will ever be aware of the source of your income if its in Russia.

A mate could grass you up. A competitor. The bank could flag your account to the tax office. Someone from the tax office could be reading this thread, get the logs of your post, trace you back to your isp, name and address. The tax office could find your website, trace the owner of the hosting account or trace the affiliate links back to your account.

All sounds a bit sinister but there are loads of ways you could get caught if your aerning a living and not paying tax.

Ta

Baz

**intothewild** · 25-08-09

So if I notify the authorities about my partnership and pay income tax on any earnings from the project, I am protected. I am willing to do this, it is far less complicated than dodging around legal loopholes in the hope that i will not be caught.

Anyone know the details about my business partner? He will be a resident for 3/4 the year for the next two years, and possibly move here after. He is to pay no tax whatsoever? Even if I notify the authorities with complete clarity regarding my business?

This whole thing is so confusing and our bankroll doesn't really stretch as far as a top legal firm to offer help to us, nor to hire an accountant. We will be marginally making more than £10k each annually probably, it all seems so complex for such a moderate sum of money.

I assume that anything involving setting up the business with him as a sole trader, operating in Russia and transferring the funds to me is equaly questionable and likely to be caught, just due to random sums of money appearing regularly in my account from a friends account? Also, this raises trust questions regarding where we would set up a binding contract between us to ensure he pays me regularly or at the sale of the site.

Gah, i hate the law

Thanks a lot for all your help, its truly appreciate in a world where I have to pay hundreds of pound for any other advice.

**tomj** · 25-08-09

Why are you even bothering to ask this question?

Its obvious your vast entertaining budget will eat all your profit on lap dancers, vodka, taxis, meals and other studenty activities :tup