Crowdfunding Regulation in UK: What You Need to Know Before Launching a Campaign

crowdfunding regulation in UK

Crowdfunding is a method of funding that has taken off in the past decade, with multiple websites springing up to offer business owners and entrepreneurs an opportunity to raise money for their business idea. But what are the crowdfunding regulations in UK ? In this blog post we will answer your questions. keep reading!

Introduction

One of the key things to understand about crowdfunding regulation in the UK is that there are different types of crowdfunding. The main categories are donation-based, reward-based, and equity-based. Donation-based crowdfunding is when people donate money to a campaign without expecting anything in return. Reward-based crowdfunding is when people donate money to a campaign in exchange for rewards or products from the campaign owner. Equity-based crowdfunding is when people invest money in a company or project in exchange for shares or ownership rights.

Learn More:  How to Run a Successful Crowdfunding Project: Tips From Successful Creators

Crowdfunding Regulation in UK: What you need to know.

The Financial Conduct Authority (FCA) is responsible for regulating financial services in the UK, including crowdfunding. All platforms that offer equity-based crowdfunding must be authorised by the FCA. In addition, all campaigns that offer rewards or products must comply with the Consumer Protection from Unfair Trading Regulations 2008. This regulation prohibits businesses from making false or misleading statements about their products or services.

There are a few other things to keep in mind when running a crowdfunding campaign in the UK. For example, you need to be aware of the tax implications of raising money through crowdfunding. Any profits made through crowdfunding are subject to income tax and corporation tax. You should also make sure that you’re familiar with the data protection laws in the UK. The General Data Protection Regulation (GDPR) came into effect on May 25, 2018, and it applies to all organisations that process personal data.

Conclusion.

If you’re planning to run a crowdfunding campaign in the UK, it’s important to understand the crowdfunding laws and regulations in your country. Although there are a number of benefits to crowdfunding, you need to make sure that you’re fully compliant with Crowdfunding Relations in UK before launching your campaign on any crowdfunding platform in the UK.

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