keyboardIf you make money through your blog then you need to look carefully at the tax implications.  I wrote a 5 part guest blog series for BritMums which went through:

  • Is your blog a trade (i.e. taxable) or a hobby
  • What expenses are tax deductible
  • Working from home
  • What income should be declared on your tax return
  • Payment in kind and non cash transactions

Blogging:  Trade or Hobby?

Some people blog for the love of it.  Some bloggers view it as their job, and as their main source of income.  Most of us are somewhere in between.

When does blogging move from being a hobby to being viewed as a trade – and what does that mean?

The basic rule is if you earn income from blogging, then you need to register with HM Revenue & Customs (HMRC) and pay tax on that income.  That income could include advertising campaigns, Google AdWords, being paid to write a review, etc.

If blogging is a hobby, you don’t blog with the intention of making a profit, and you only very occasionally receive something in return then you should be OK.  Keep track of any amounts that you do earn, deduct any costs of running your blog to calculate your profit, and if the total is under £2,500 then you can ask HMRC to adjust your tax code so that any additional tax is paid via PAYE.

On the other hand, signing up for Google AdWords, or selling advertising space, shows clear intent to make money from your blog.

The shift from hobby to trade is a grey area and can happen gradually.  But you need to be careful – HMRC won’t accept lack of knowledge as an excuse, and you could end up having to pay penalty charges as well as back taxes.