You need to be creative (within the law) with your expenses. Plenty of different things that the ‘big boys’ do here in the UK. One would be to purchase sites/ domains or such like to reduce your profit in any given year (i.e. ‘reinvest’ enough so that you aren’t in the upper bracket). In future years, these are then sold off as ‘assets’, using the Capital Gains Tax alloawances (£10k a year), with a fixed rate of taxation of 18% thereafter. It’s rather complicated to make sure that you set up things correctly, and not something I’ve done myself.
Being paid into player accounts means that withdrawals might look like gambling ‘winnings’ (hence tax free) – but this is technically tax evasion, and would be treated as such. I presume you’re more interested in tax avoidance (legal). Do you work from home? Make sure you’re billing yourself a portion of bills (mortgage interest/rent/council tax/heating etc) for the space you use. Lets say you have a study at home that you use for work. You can declare that you’re using that 70% of the time for work purposes. Lets say you have 6 rooms in your house (exclude bathroom and kitchen), you can then write off 70% of 1/6th of your bills. Just as a small aside, never declare 100% usage as a workspace as this can cause complications. Firslty, you’d technically be liable for business rates (and this might invalidate your mortgage). Secondly, if you’re ever investigated by Inland Revenue and they find you’ve been using the study for personal use (i.e. photos/ music on computer give it away) then you’re in trouble for writing off expenses that you shouldn’t have…hence most people stick to around 70%.
You can always make capital purchases that are related to the business, as these expenses are now written off 100% in the first year. i.e.a computer purchase of £1,000 is written off as an expense against your profit. There are obvious things like pension contributions too (got a SIPP?).
Just be careful as as a UK resident is liable to pay tax on the money wherever it has come from. Evasion and avoidance are two different things…and with enough planning anything can be reduced to the lower tax bracket.
themac