Business Income is defined as any income which is realised as a result of business activity. To explain further, this is any money you receive for what you do.
Income as a Slimming World Consultant comes from several different areas and you should consider these below.
Each week, members pay a fee to join or attend a Slimming World group. This is income as you are receiving payment for goods/services provided. The original amount which the member (or customer) pays is taken into consideration with this, therefore if the member has paid £10 to join, your income from this is £10 (do not reduce this figure based on your earning percentage, you need to take the full amount).
Group Shop Sales / Hifi
Items which you sell in your group shop, such as books or motivational tools, should have the full selling price logged. For example, if you sell ‘Book A’ for £4.95, you should consider the full amount as your income for this, not the commission you make (mark up) on the product.
Josh buys a book from the supplier which costs £4.65, however the product is sold at £4.95 in his group. (30p markup)
The amount to consider as income is the full amount which the product is sold for, £4.95.
The £4.65 cost is an expense which is logged elsewhere
For hifis and magazines, Slimming World is treating you as an exclusive ‘agent’ and these items are on a Sale or Return basis. As such, you can use the commission value to calculate the amount of income you’re receiving from these.
However, if you are invoiced direct for Hifi Bars (e.g. additional ones which are not sold through your franchise), these can be calculated at the full fee.
Selling between colleagues
If you bought something (e.g. visuals) and then sell them to a colleague at a later date, you’re receiving an income for the item you’re selling.
The cost to purchase the item originally will have been logged as an expense.
Advertising with colleagues
If you arrange the advertising for yourself and another colleague(s), you are receiving payment from your colleague for the advert. This is income as you’re paying the full bill (which would be an expense).
Sundries (where you receive income from Slimming World) is another form of income. However, some sundries (e.g. XPW Insurance) can also be expenses! [read more]
Recruitment Bonuses / Prizes
Received a prize or a bonus for recruitment? These are counted as business income. [read more]
As such, any money which comes into your business is classed as Income for HMRC purposes. You should keep a log of all such income for your annual tax return.