I'm just starting

**BuzzingDomains** · November 13th, 2010, 02:01 PM

Hi,

I have bought domains before and then sold them, well about 3

But now I would like to buy a few domains, get some content and stick some ads on and try and earn a bit of money (not loads). I'm not expecting loads of money and I know this will take a long time to start seeing results.

But I have a question:

Do I have to set up an official company to receive money for ads on a website? Or can I just have it paid directly to my personal account?

Thanks

**Kay** · November 13th, 2010, 02:22 PM

Hi BuzzingDomains. Why not introduce yourself?

In answer to your question, no, you don't have to set up a company. Plenty of businesses trade as sole traders, partnerships, etc. A company is not necessary, and you can receive advertising revenue into the bank account of your choice.

**BuzzingDomains** · November 13th, 2010, 02:46 PM

Thanks, well I'm only 16 years old.

Can I also, what is it called when you use another company's software on your website and get commission?

For example if I wanted to run a car insurance comparison website and used this system:

http://www.gocompare.com/car-insuran...=1&media=OM001

I know there is a name for it, but completely forgotten.

**BritishARMY** · November 13th, 2010, 04:00 PM

Hey, I'm a similar age, sometimes there can be so many things to choose from (CPA, Adsense, buying and selling sites/domains, etc) that it can throw you off track. I've switched between so many things in the past year.

Erm is it a white-label system you're thinking about? Or red flag... something like that. Some sites that have affiliates have these systems to use.

Welcome to the forums btw!

**Kay** · November 13th, 2010, 04:41 PM

Sorry to be boring, but please do keep good records of your business dealings. You don't need to have a company to do business but the tax man may come after you regardless of that, so protect yourself by having these records of your transactions or you could land yourself in trouble.

Also be aware that being under 18 restricts your rights in the UK to enter into legal contracts. I don't see why it should be a barrier to starting your internet business but it's something you should be aware of.

Also, if you are 16, there are several organisations around that give grant money and support to young entrepreneurs so be sure to make the most of that and get any freebies on offer.

Good luck! And gi's a shout if there's anything we can help with.

**BritishARMY** · November 14th, 2010, 07:16 AM

That's the thing I'm a bit worried about, as I don't have a clue when it comes to tax. AFAIK (and I don't know much) we get the first £6k we earn tax free (is that correct?) I've earned less than that so I think I'm OK for now. I expect next year to get 'serious' so I'll need to find out more... anybody else know anything on this?

That's the other thing, being under 18. I'm 18 in around 4 months so for now I use my dads PayPal (with his permission), which is handy as I wouldn't want to risk it.

**Kay** · November 14th, 2010, 07:53 AM

There are certain things where you will be safer to take professional advice. However, professionals are expensive so don't go paying an accountant to do things you can do for yourself.

For starters, get some info about tax straight from the horse's mouth, you'll find all sorts of useful stuff on the HMRC site.
http://www.hmrc.gov.uk/index.htm

Also scout around for websites specially for business start ups, young entrepreneurs, and business funding. Here are some suggestions:

http://www.startups.co.uk/

http://princescharities.org/princes-...-international

http://www.angelsden.co.uk/

http://www.shell-livewire.org/

I used to be an accountant so I can maybe help with some of your questions but I don't do tax, not even UK income tax for myself as I'm non-res, so I won't be able to answer any tax questions.

**BritishARMY** · November 14th, 2010, 08:10 AM

Thanks for those links, Kay.

This tax year (2010-11) the basic Personal Allowance - or tax-free amount - is £6,475.

That's handy if you're earning a small amount (like myself atm). The figures for taxable income are like 40% or 50% for income over £150k, and it's less for less money but it's a lot they take away. If I start earning a lot I'm going to move to another country (preferably one with a low tax rate

), not (entirely) for tax reasons but because there are much nicer countries in the world!

**Kay** · November 14th, 2010, 08:25 AM

You're very welcome. I enjoy feeling useful.

Don't forget to check out the NIC (National Insurance Contributions) rules too while you're at the HMRC site.

When you start making a lot of money (or even before then) there will come a time when you may be better to incorporate (start a limited company) to reduce your tax liability. Starting a new company is very cheap and easy but the admin and reporting (to HMRC and Companies House) can be a bit onerous at times, so definitely don't rush into it. You will most likely need an accountant to do your tax by then. But you'll be able to afford it!

As for moving to live in another country - great idea! Welcome to expat land. (BTW, I didn't move because I had too much money.

)

**Fiveleaves** · November 14th, 2010, 08:53 AM

For me ( Uk based) this begs the question - I am starting up while already in a salaried job - thinking first and foremost to make money from advertising on websites - if I do it as a sole trader I'll presumably be paying tax on all revenue at my marginal rate as it comes to me personally.. If I incorporate I'll have the overheads of reporting, but if I don't draw salary then I only pay tax on salary I draw down and actual profit.. It seems I may have answered my question already.. it looks like it makes sense, even if I am starting off only making a few hundred dollars a year, unless I am missing something vital - please feel free to say if I am.
Also I suspect I would make sense, even if very small, to register for VAT.