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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4802
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am doing my accounts -2015. During that time i received

Resolved Question:

I am doing my accounts for 2014-2015. During that time i received funding for a project which I was managing. The funding covered artists fees, travel expenses, venue hire, materials, publicity etc. Am I supposed to include the whole amount in my incomer? Or just the amount from the funding that I was personally paid?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Hello and welcome to the site. Thank you for your question.

You say you received funding for a project that you were managing.

Please advise if -
artists fees, travel expenses, venue hire, materials, publicity etc.
were paid by you out of the funding?

Many thanks
Customer: replied 1 year ago.

HI

I received 2 sets of funding through 2 different crowd funding campaigns in the tax year 14-15.

One was for a music project I was doing on behalf of friends in Zimbabwe. The funds went into my bank account (personal bank account, not business bank account) but were not payment to me. I used the funds in my account to pay for cd manufacture, duplication and distribution, as well as artists fees to the musicians in Zimbabwe, and crowd funding expenses. I did not personally gain any money through the project

The second crowdfunding camapign was for a performance and film project in the UK. Again the funds went into my personal bank account and i used them to pay for artist fees, travel expenses, venue hire, materials, publicity and crodfunding expenses. Some of this money was payment to me for my role int he project

Expert:  taxadvisor.uk replied 1 year ago.
Denise, thank you for your reply and for the information.

You say there were two sets of funding and you received money for both of them albeit one project was on behalf of friends in Zimbabwe.

My advice to you would be show income from both funding campaigns in your accounts notwithstanding the fact there was no personal gain in the project you did on behalf of friends. In this project your outgoings would match your funding income.

The second project would show a profit to reflect a return for your role in the project.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 1 year ago.

thanks for your reply. Am I legally required to show project funding as personal income or is it just that you suggest this in this situation? Is it because its going through my bank account?

For future, would it be better to open a project bank account and then just show the income to me in my accounts?

And finally, is there a limit to the amount of money my parents can gift to me without ne having to pay tax on it?

thanks

Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.

A contribution towards the running of a project (funding) is income and it is good practice to show that as income. You should try to separate monies coming into your personal account between business related and private. It is better to open a business account for ease.

There is no limit to the amount your parents can gift you. Monies received in the hands of the recipient are free of tax. There is no tax on gifts.

Having said that, there are inheritance tax implications for the person gifting the money. They are regarded as potentially exempt transfers for IHT purposes.
More information on this can be found here

http://www.which.co.uk/money/tax/guides/inheritance-tax-explained/inheritance-tax-planning-and-tax-free-gifts/


I hope this is helpful and answers your question.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4802
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.

Best wishes

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