Found this for the U.K.:
Don’t see mention of reseller permit, but if you are purchasing materials to be exported then that may be VAT exempt and you can request that tax money back.
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From what I’ve read so far, I would either have to run the forum as a sole trader or, I think more relevantly, as an ‘unassociated association’.
I help run a server co-op here in the UK and we pay our hosting costs out of membership subscriptions. We don’t seek to make a profit other than for contingency (when we used to co-locate and needed new hardware, for example). Perhaps that’s similar to your situation?
If so, we set up as a “Partnership” (i.e. an unincorporated body) under UK law. We don’t have to submit accounts, but do submit an annual tax return. I can ask our treasurer what that involves, but I get the impression it’s very simple.
BTW we were VAT registered for a number of years as some of the members were too so it made their subscriptions cheaper. But we de-registered recently as it wasn’t worth the hassle after a while.
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This applies to the UK and I’m not an accountant so you should verify any of this before acting on it…
I understand from a friend who has a charity role with a (very) small income that HMRC are no longer interested in miscellaneous income that’s below £1000/year (in total). I guess that at low incomes the tax that can be levied (probably less than £200 on average) outweighs the cost of processing a self-assessment return. So if you’re paid through PAYE and a little extra income would mean you have to complete a self-assessment it’s too expensive to do that so it’s not necessary.
If your forum turnover will be more than £1000 then you can follow what is called a simple bookeeping approach. Basically just record all incomings and all outgoings related to your ‘forum business’. It doesn’t matter how you receive the money, e.g. as cash, cheque, bank transfer into your own account, payments into another ‘business account’, Paypal, etc. Just record all the transactions along with details of what they are/who paid you, etc. You probably don’t want to set up a business bank account because those are likely to add costs, so using a personal account is fine. Just be prepared that you might need to provide evidence that you’ve recorded all income so you may have to provide marked up personal bank statements showing forum related income and costs.
You can only claim reasonable expenses, so you’d need to investigate what ‘allowable expenses’ are for running a forum. For example, it’s difficult to see how you could justify including transport expenses (company Rolls Royce) for running a remotely managed forum server, but the cost of running the server and paying for domain registration fees is likely to be allowable. Also be aware that paying for a server and using part for a public forum and part for a personal project, e.g. your own email and blog, means you can’t claim the full expenses for the server…just pick a reasonable split that you could justify.
If you’re running this on your own, then register as self-employed with HMRC. If you’re running with others you can register as a partnership but I don’t know what this means these days as it’s 15 years since I was in a business partnership with anyone. You’ll have to start doing a self-assessment return each year, if you’re not already doing one. Before you do the assessment, just do a simple balance sheet for the financial year - a spreadsheet is good enough. A few columns are needed - Date - Description - Income - Expense. Add up Income. Add up Expenses. Subtract Expenses from Income for Profit. You’re best leaving your own 'financial year as the same as the HMRC tax year, i.e. based around 5th April.
On the self-assessment form say you need the Self-employment pages.They’re simple enough…basic info about your self-employment, your turnover (Income) and your expenses, and I think they ask for Profit too. They will calculate how much tax you owe and if there are any National Insurance implications.
Source: I was self-employed for many years whilst running a forum (with something else tagged on the side). I did my own accounts every year and never had any queries from HMRC about how I was doing it. It saves on the cost of paying an accountant if you’re confident enough to do it yourself.
Bonus Tip: If your expenses exceed your income, then you have a negative profit (loss) which can be offset against any other income you have, e.g. PAYE from a day job which can save you paying a bit of tax. That was certainly true for me for a few years!
PS. If your forum is making ‘big bucks’ then the above probably won’t apply!
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Thanks @gilgongo and @packman. I appreciate the advice and I’ll take it under consideration
I’m not charging subscriptions at the moment while the running costs are affordable as a ‘hobby’. I’d like to find a way to cover those costs at some point, possibly through a combination of voluntary subscriptions, merchandise sales and maybe some company sponsorship (as opposed to targeted ads via Google) that either pay an annual fee or offer some other discount to subscribing members as an incentive. I’d have to see what works.
I’m self-hosting so costs are mainly for virtual servers, storage and domains. They’re all paid for by me but I don’t use any of the resources for activities outside the forum.
This sounds like it may be the unincorporated associated’ I’ve read about. The accounts wouldn’t be a problem. I already keep a spreadsheet with all forum related transactions and I set up a separate personal account just to keep things tidy. I already submit annual self assessments.
I still have an accountant as my limited company is still active so I’ll see what they can advise as well.
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