I am a total newbie when it comes to taxes… They’re something weird for me. I have a bunch of questions, regarding how taxes are handled, and how the overall money part of kickstarter works. Here we go!
- I’ve heard, that the money you owe to Epic Games for using Unreal Engine is 5% of the value of the game. Even if you have a reward tier of £100 - if your game is worth £20 of those £100, you pay 5% of those £20. Is that true?
- I’m based in the UK, so UK tax laws apply. I am not listed as a sole-trader/company/anything. I’ve been working part time for a company so far, which makes me ‘employed’. Must I declare that I’m ‘self-employed’ for the money from kickstarter? If so, where?!
- Can I make deductions from those income taxes? Basically, the system works like this here : Everything you earn above £11,000 for the year is taxed at 20%. If, let’s say, I make £20,000 from kickstarter, and I declare that I’m buying licenses for £5000 and a new computer for £2000, does that mean that I’ve only made £13,000? If so, I have to pay 20% only on the £2000 difference, correct?
- Let’s say I’ve earned £4000 on my ‘employed’ work this year. Does that count for the £11000 minimum for self-employed people? I mean, now when I switch to self-employed, do I start from £4000 or from 0?
- Do I have to pay VAT on kickstarter? If so, based on what is it calculated? (the whole kickstarter pledge or just the value of the game, like Epic Games do)
- What steps can I take in advance to make everything easier and to not get into trouble?