Inland Revenue cracking down on traders on eBay

powerbase wrote: »

One thing which I don't think has been suggested yet and that is contact the IR themselves. They put courses on for startups and they are very helpful. If you are just starting out the SA tax bit you fill in (if your turnover is less than 15k) is 3 lines. Very simple. People see a lot of pages and writing and freak out. If you could on a free IR course they will take you through it line by line.

One other thing which I have mentioned on other threads is doing a tax return for your ebay business can often open peoples' eyes about how profitable or not their business is. I have seen people say they sold x items on ebay and they made £50, but they forget the listing fees, final value fees, paypal fees, petrol to the PO etc. and one big one is items you listed but did not sell.

Not saying everyone is like this but I have noticed when helping people start up they think their profits are more than they are as they see the money come in and forget about it going out as it's easily done. False economy sometimes. Then again you could argue some people do it for the fun.

The best thing (yes I did actually say that) about the tax return is it makes you face up and do your accounts properly (or well you should).

My problem with paying tax is what the govt waste it on but that's another thread.

Good luck with your ebay adventures.

One other thing is I read earlier that business lose out first year, break even second year and profit third year.

My business made a profit first and second year but recently the profits have been reinvested to expand the business so third year profits will be less. Does this look dodgy to the tax people? I'm really anal about my tax return so I'm not worried about them finding anything but really don't fancy the pain of going through an audit as I've heard it's not pleasant.

Regards