YouTube AdSense - New Tax Requirements!

Video Statistics and Information

Video
Captions Word Cloud
Reddit Comments
Captions
google are changing their tax policies for paying people unless you want to pay tax twice you need to pay attention to this video [Music] hi folks welcome back to the small business toolbox i'm andy mack and i've run my own businesses for 25 yeah anyway a long time i thought by popular demand i would make a really quick video about this whole adsense youtube google tax change thing that they're just about to bring in quite a lot of people have been asking about it and if you make money through adsense in any way whatsoever so not necessarily youtube it could be any form of adsense income as far as i'm aware so if you run adverts on your website for example or you do what i'm doing and you make youtube videos and you make money through adsense on youtube then this absolutely affects you if you don't sort it out you are potentially going to end up paying tax in the united states and tax in your home country as well and you do not want to be paying tax on the same income twice i did watch a video by youtube about how straightforward it is to sort this out the reality is far from it when you start getting into international tax treaties and whatnot it is not straightforward at all but i'm gonna take you through my approach to it for for myself i'm doing it as a limited company if you aren't a limited company and you are a sole trader self-employed and you're doing it as an individual you still need to do it it might be very very slightly different to the way that i'm doing things i will talk about that in a minute but i'm doing it from a limited company perspective and i'm obviously in the uk as well but i would presume wherever you are in the world it's going to follow more or less the same kind of process but you're gonna get into the realms of what sort of tax treaties your country has with the united states all i would say here as well is absolutely speak to an accountant about this i am not an accountant i am not qualified in any way to give you accountancy or legal advice i'm just showing you how i'm doing it and hopefully that'll benefit you in some sort of way but if you want to play safe you absolutely do need to speak to an accountant about this i spoke to three separate accountants about this and none of them knew what to do if you do know what to do and you are an accountant please post down in the comments below if you provide a link to your business as well which i'm more than happy for you to do if you're gonna help people out as long as you're not getting kind of spammy and things but links do get quarantined so don't keep on posting the same thing over and over again and i will release it as soon as i get a chance anyway let me take you through what i'm gonna do for this whole adsense thing from a limited company perspective and hopefully it's of some benefit to you so log on to your google adsense account and you should get this banner towards the top of the screen saying that you need to provide this new tax information if you don't have that banner you should find it within the payments section but if you haven't gone through this process yet just click the option that says manage tax info and then that should take you directly to this where it says manage tax information it's in the payment settings manage tax info area of adsense to get payouts from google make sure you provide your tax information this will take a few minutes yeah right so click add tax info and as i say i'm doing this as a limited company if you are a self-employed sole trader you would do it as an individual but i'm doing it as a limited company as i say so i need to select the option non-individual or entity so i am basically an entity it's got this thing is your name a dba doing business as name or disregarded entity it doesn't really make a whole lot of sense it doesn't really apply for myself so i'm leaving that unchecked and click next and it then says is your entity organized or incorporated in the us and it is not it's a uk company but again if you're doing this as an individual you shouldn't see this option coming up so we'll just click next and then it says select the tax form type that you need to fill in generally speaking it's going to be the w 8 b e n e which is basically the entity version of the hben form if you're doing it as an individual well i'll just show you that so if i select the individual box you'll see are you a citizen or resident of the united states which i'm gonna say no and then the option is the w8ben but because i'm doing it as a limited company it's the w8ben e then i'm just providing information specific to my limited company so you would put your company name there whatever it is limited you can't have punctuation so don't put ltd dot just leave the dot out doing business as name or disregarded entity it says it's optional so i just left that country of incorporation united kingdom what is it it's a corporation it's actually a company we don't really call it a corporation in the uk but uh yeah it's a limited company taxpayer identification number it doesn't tell you what number it wants so i used the company utr you should have a utr unique tax reference number for your company if you haven't speak to hmrc and get one and that is the number that i put in for the foreign tax identification number and then just click next and then it's asking for some address details now this is quite badly worded and it says permanent residence address i think what it means by that is what is your official registered address of the company which in my case is my accountant and uh yeah so just put in your official you know whatever it is on company's house and then below that you can add a postal address and if you've got a personal address i don't really see too many problems adding that in there i don't think this is going to be made public anywhere so as i say you've got your registered company address at the top and then correspondence address at the bottom and then we get into the slightly more complicated bit and that is the tax treaty are you claiming a reduced rate of withholding tax under a tax treaty yes we most certainly are because we don't want to get taxed twice as i say so i've ticked the box that says resident of country claiming a treaty with the us and then i've selected united kingdom from the drop down list if your country isn't listed there then i don't think you can claim any sort of tax treaty or tax benefits you're going to end up having to pay tax in the united states but because the uk has a tax treaty with the us then we can benefit from that and then it says derives the item of income for which the treaty benefits are claimed i'm assuming you have to tick that box because it doesn't let you not tick the box and then it says meet the requirements of the treaty provision dealing with the limitation on benefits again you've got to take the box so yeah you've basically got no option and then we get to the limitation on benefits oh my word so here's the various options you've got company that meets the derivative benefits test company that meets it ownership blah blah blah you've got all these options i've spoken to three separate accountants about this and none of them know anything about this i think it's a company that meets the ownership and base erosion test and the only way i've managed to find that out is that i did a bit of a search on the hmrc site and i found this hmrc internal manual this is intended for hmrc staff by the way and it says in here cdt19882 for the main provisions in most cases this will be sufficient to determine entitlement but in more difficult cases the following further explanation may be useful qualified persons and it gives you a whole load of terminology for what a qualified person is but the only thing i can find that is relevant to a limited company in the uk is the option that says a legal entity that satisfies an ownership and base erosion test so what is a base erosion test and here we've got the definition of how is the base erosion test satisfied and it's full of it's awful the way this is worded it makes no sense it's full of double negatives but i think this is the one that applies if it if there's any accountants watching please let us know in the comments below if you can plug your business add a link to your business i'll de-quarantine it if it gets blocked but uh yeah if you know the answer to this as i say i've asked three separate accountants and none of them have ever come across this before but it says the base erosion test is satisfied if less than 50 of the person's gross income for the relevant taxable or chargeable period is paid or accrued directly or indirectly to persons who are not uk or u.s residents in the form of payments that are tax deductible for the purposes of the taxes covered by the treaty in the country in which the person is resident and by the way youtube very kindly or adsense very kindly provide a link to the tax treaties it's i think it's 130 page plus pdf of legal spiel for the uk tax treaty and then there's a whole load of subsidiary documents that go off on that so yeah forget about trying to understand that yourself as i say most accountants i've spoken to don't really know what the answer to this is so anyway you can try and make sense of that awfully worded statement but i think that is the one that applies so all i've done is i've ticked those two boxes and i've selected the option company that meets the ownership and base erosion test as i say let us know in the comments if you think that is wrong and then you can go through and take all of your special rates and conditions which i'm assuming all need to be put on zero percent because if you have it on anything other than that you're going to end up paying double tax you'll pay tax in the us and you'll pay tax in the uk which you only want to be paying one set of tax so we've got a couple of options we've got services adsense we've got motion picture and tv which is youtube and google play and we've got other copyright which is youtube and google play so i'm assuming for a youtube channel you're gonna need to take all three of these you're gonna need the adsense one and you're gonna need these other two that cater for youtube so all i've done is i've ticked the boxes and it gives you the there's only one option that you can select and for example article seven paragraph one reduced rate article 12 paragraph one reduce rate article 12 paragraph one reduce rate for all three options but it only gives you one option for each of those so i assume that's correct anyway once you've done that click next it will then give you a bit of a summary of everything that you've done just double check that you've filled it in all correctly and you can download the forms that it will have automatically completed for you but i think you can get access to these anytime so i don't think you particularly need to download them but it's probably good practice to download them for your records and then you need to take that i confirm that it's all correct and do next then all you need to do is certify it and it says full legal name signature of individual authorized to sign for the beneficial owner so i would just put your full legal name in there if you are the main director and shareholder of the company and click next we've then got a couple more legal confirmations here activities and services performed in the us these are the options that apply to me i'll take you through it very quickly has the individual or entity identified in the tax identity section performed any activities and services for google within the us well no i've performed all of my services for google within the uk i am uk based the company is uk based my videos and everything i do is done in the uk i think what this is getting at is if you've got like an office in america or you regularly fly over to america to produce your videos maybe that would influence what you need to put there but for me it's a definite no everything i do is in the uk if you operate a youtube channel where you regularly fly over to the states and you're maybe employing people in the states to help you make your videos then i would say that that wouldn't apply for you i think you would need to speak to an accountant probably in the us and maybe in the uk as well to work out what you need to do in that situation but for me i don't make any videos in the states so that just doesn't apply and then we've got a state exchange affidavit as well i think what this is basically getting that is is it a brand new adsense account or is it an existing one it says are you providing tax information for a new or existing payments profile that hasn't received payments or an existing one and for me it's an existing one the first option i am providing tax info for a new or existing payments profile that hasn't received payments that's not the case for me so i'm definitely the second option and it says under penalties of perjury i declare that the information and certification contained herein remained the same and unchanged except as provided below from 1st of january 2020 until the present and were true correct and complete for that time my word who writes this stuff to the extent that there were any changes please detail them here and include dates of relevant changes makes no sense don't know what it means it's optional for the changes box anyway once you've done all that click submit and when i click submit wonderfully it had timed out so i had to fill out the entire thing again i don't know how long you get to fill it in but i would be fairly quick with it you haven't got time to research stuff as you go if you do it'll time out by the looks of it and you'll have to do it all again but that said you're on your own with this as i say youtube provide no help outside a link to the irs tax treaties which are just meaningless for any normal person so i don't know what you're supposed to do and as i say three accountants have spoken to are equally in the dark so do let us know in the comments below if you've got anything to add to this anyway once you go through it all again and hopefully it hasn't expired this time then you should get a nice approval screen that looks a bit like this and it should be approved immediately so mine is showing the form w-8 b-e-n-e for the limited company and it's showing as approved when it was approved and just confirmation of everything that i've put on those forms and as i say i think from here you can download all the pdfs of those forms anyway and that is it in a nutshell it's quick to fill in but understanding the information in it is not easy at all and i think frankly i think it's criminal that youtube are even telling people that this is easy to fill in it is not easy to fill in unless you understand international tax treaties as i say and as per usual i'm just showing you the way that i'm doing it for myself i'm not saying this is the way you should do it you need to speak to your accountant and you need to do your own research on this because yeah international tax treaties they aren't straightforward but hopefully by doing this the whole objective is that we don't end up paying tax twice we want zero tax being paid in the states and then i for my company i will pay corporation tax in the uk if you're self-employed you would pay income tax through self-assessment in the uk as i say don't pay tax twice i hope you found that useful if you've got anything to add or maybe you've spoken to your accountants about this and maybe you can confirm or tell us anything that i've got wrong please do post it in the comments below and we can all benefit from everyone's knowledge on this in the meantime folks take care and i shall see you next time
Info
Channel: Small Business Toolbox
Views: 12,224
Rating: undefined out of 5
Keywords: youtube adsense, adsense tax changes, youtube tax changes, google tax changes, adsense tax uk, youtube tax uk, adsense tax info, youtube tax info, double taxation, youtube creator tax change, youtube creator in uk, youtube earnings uk, adsense earnings uk, money from adsense uk
Id: hu6w7Bz5DlQ
Channel Id: undefined
Length: 16min 37sec (997 seconds)
Published: Mon Mar 15 2021
Related Videos
Note
Please note that this website is currently a work in progress! Lots of interesting data and statistics to come.