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EveOnlineTutorials's avatar

Money from JA is not taxable, you are not "employed" by JA - This money is simply being "given" to you. I am fully self-employed and I asked my accountant this exact question. Since we don't have "contracts" with JA, the money is not employed earnings.

Hope this helps. This is the UK however.

MargotCandy's avatar

I wondered if it would come under the “hobbie” earnings though which is a limit of £1000 a tax year in the UK but good that you could check already with your accountant. That means that angle is probably redundant and it’s just nice free money hopefully. 😅

Sturmer's avatar

ANY income, including bonuses and donations from social platforms, is taxable if it exceeds the annual trading allowance of £1,000,You need to declare this income to HMRC.

Authority doesn't care about contracts or statuses, they are tracking money transactions

Dave's avatar

Their is an argument to say it's competition winnings though, which would be tax free. The JA terms say they are a competition and therefore they would competition winnings.

I'm not offering any tax or financial advise here just to be clear, I'm simply debating the subject of the thread and I personally don't know either way. I suspect this is the angle the accountant is taking on this and it sounds plausible in the right context/personal circumstances.

The activities may be skill-based contests. In skill-based contests, chance plays no part in determining the winner. Each entry will be individually judged, based upon individual merit. Entries must be an independent creation by the user and free of any claims that they infringe any third party rights. Entries must not have been used in other competitions or contests.

HMRC in answer to a prize from a Hackathon contest:

"

Prize money, goods and any incidental expenses awarded on entering a competition would not be taxable.

As long as they are not considered as a normal source of income for customers trade, vocation or profession and they do not arise out of the customers employment.

So, if the prize is connected with the customers trade or profession etc then the general rule is that it will be taxable.

An example would be the sports profession such as golf, snooker or darts etc or Authors and other creative arts professions.

Where it is seen as a normal part of the profession to enter related competitions and receive prizes for doing so.

"

EveOnlineTutorials's avatar

This is what my accountant said, it’s essentially a regular competition so the earnings cannot be taxed unless you receive over 1k in a month from it.

EveOnlineTutorials's avatar

well I hope so or imma be in trouble come a new tax year lol

Sturmer's avatar

It's an annual limit. You might want to consider finding a new accountant lol

EveOnlineTutorials's avatar

Actually it's not and you need to stop being so quick on your replies. Whilst the 1k limit becomes taxable that is ONLY if the "winnings" become part of your budget i.e. earnings, since JA is NOT part of my budget, the 1k limit is not in effect for that transaction, as for me ditching my accountant. I've been using him for 15 years. So no?

Lanah Tyra's avatar

That's actually very useful to know, thank you! I was sitting here keeping a track of all rewards income and expenses which I could put against them 😂

Dave's avatar

Are they absolutely sure? You don't need to be employed or have a contract for income to be taxable. If you can class it as a competition that you "win" then I guess it isnt and maybe that's the angle being taken. The other argument would be you are performing a requested action such as make a video about x, and then if it's good enough quality/liked you are paid for that service/product.

In crypto airdrops, If you do nothing and get the airdrop then it's tax free, but If you do anything to "earn" it such as make a social media post to be able to claim it, then you have provided a service in return for the payment and it's income.

I guess an accountant would know best though and I'm just going off google and past crypto tax affairs (that I did myself). I have been conscious of not entering too many things and keeping under £1k also as im hoping to get off self assessment this year. I'd be interested to know if they have formal written advice about it as if so I will start entering more stuff!

Dave's avatar

Not saying it's wrong (and Im not an accountant obviously) as it will be great if it is correct just to be clear! Just tax is incredibly complicated and if HMRC can find a way to classify something to make it taxable, the the will do! Lol

Horror and Cats's avatar

I quite literally just realized yesterday the amount I am getting will surpass the threshold in the US for “other income” in a year.

I’m doing research on it, but I’m bookmarking this chat and will update when/if I have some solid info.

Sturmer's avatar

Platform payouts are considered income and might be taxable (depends on a country of residence). Heck, even gifts from family members can be taxed if they exceed certain thresholds.

PayPal isn't a bank, so it doesn't have to report your annual activity to tax authorities. For off-ramping from PayPal, you can use various neo-banks with EMI licenses, which also don't report your transactions unless you ask them to.

My advice? Simply declare that type of income and ask the authorities if any tax is applicable. Then, pay it to stay on the safe side.

Alternatively, you could disable the PayPal connection so that JA won't be able to make payouts to you. According to the roadmap, we'll soon be able to create our own bounties, providing another way to use your accumulated balance.

Or, you can participate in bounties and submit responses as comments, thus not receiving any rewards. I've done that countless times, hehe.

MargotCandy's avatar

oh how silly of me! I forgot I could just unlink PayPal. 😅 I forgot about that completely! Thank you.

Sturmer's avatar

please keep in mind, that using balance for creating own bounties is my guess, but its seems very logical

Dave's avatar

Yeah that is the answer to the actual question rather than all our discussions! Disconnect PayPal, then reconnect in another tax year (although that still might count as earning it on the date it went into the JA Wallet anyway, who knows!)

Kane Carnifex's avatar

Flexxing as German.

We can have ~17,5K per Year for Extra income, without taxes. If you have entered the "small/little" Buissness part.

You can´t just get money, without performing any actions.

MURRRAAAAY's avatar

This is a super interesting discussion, I thought just about bounty’s would be taxed the same way say twitch donations are for example ? Very cool discussion JA!

The winnings part is interesting as if your regularly winning aka a decent amount of cash each month would it still be looked upon as winning which I wonder if they are meaning more random like you won the lottery once on a blue moon sort of thing! Very good to see everyone’s views, opinions and experience on this subject as it can seem like the dark arts trying to understand it all on your own sometimes!

Dave's avatar

Yeah I don't think anyone is going to know the actual factually correct answer. At the moment we are all winning often and decent amounts, but lets say in the future it's as popular as reddit and every bounty has a ton of entries and only a few prizes, so there is not much chance of winning and the payments will not be so regular. In my mind in that situation it's pretty obvious it's competition winnings and as per hmrc guidance then it's not taxable in the majority of peoples circumstances.

However, even then if your primary income is content creation then it's still a bit of a grey area as it's arguably supplementary income off said content as that is your profession and main income, to make this sort of content. It's going to be different for everyone.

TheGreatestBanana12's avatar

Bounties are winnings but organic rewards aren't just to complicate things further

MargotCandy's avatar

yeah those were the main ones which I wondered how to “turn off”. Like I can choose not to enter bounties or just enter replies instead but organic rewards are out of my control if I just want to participate.

But then the obvious thing would be to disconnect PayPal if I want to avoid actually earning anything which was mentioned earlier in the discussion. It will be interesting to see how it evolves especially with us already covering several countries’ tax laws in that sense 😅

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