Hello,  I've sold a few copies of a game I've made and I now have a "Gross Revenue" listed on my creator dashboard. I've currently got my payment method set to "Collected by Itch.io , paid later", and on my payouts page it says "You have [X] payments available for approximately [87% of gross revenue]" (I've changed the things in square brackets here, I hope that's obvious). 

My first question is - Is the difference between gross revenue and the payout amount due to the "withheld tax" based on me being based in the UK? What is included in the "withheld tax"? 

My second question is - From a UK tax perspective, how do I log these earnings, and do I have to put them under sales (and then presumably ALSO pay UK corporation tax on them? Or have I already paid taxes on them (and so how do I log them then)

My third question - I can apparently only move these funds via Paypal/Payoneer. Do I just need to transfer them into, say, a paypal account and then transfer from that account to a company account?

Thanks for any help, I've also tried asking this to a UK tax professional but their answer didn't make complete sense. 

 

Before you read this, keep in mind I’m not a lawyer.

My first question is - Is the difference between gross revenue and the payout amount due to the “withheld tax” based on me being based in the UK? What is included in the “withheld tax”?

In the UK, the withheld tax should be 0%, as there’s a special trading agreement with the US. If I remember correctly, when clicking the button to request a payout, you get to a screen that gives you all the details of how much money you can withdraw and why, before confirming the payout.

The very first time you make a payout, you have to pay a small fee (I think 3$?) to cover some expenses that Itch.io took when you did the Tax Interview, and other relevant costs.

My second question is - From a UK tax perspective, how do I log these earnings, and do I have to put them under sales (and then presumably ALSO pay UK corporation tax on them? Or have I already paid taxes on them (and so how do I log them then)

I’m not sure how that works with a company. As an individual (Sole Trader), Itch.io takes care of all sale taxes for you, but then it becomes your responsibility to declare income tax in the UK. Maybe the process is similar when having a company? I’m not sure, you would have to look at the HMRC site for details, or ask someone qualified.

My third question - I can apparently only move these funds via Paypal/Payoneer. Do I just need to transfer them into, say, a paypal account and then transfer from that account to a company account?

Again, not sure for a company, but maybe you can keep that money in a company-owned Paypal account. What you do with them afterwards is up to you, although they do have to be declared as company-income at some point.

Hope that helps :)