Business Account - is it a good idea?

hev_2

I have had some really good advice here, so I thought I would ask.

Is it worth updating to a Business Account? I have a Makro card and live within walking distance, I suppose I could earn some pin money that way on ebay (I'm under very few illusions - this time next year I'm unlikely to be a millionaire). What are the benefits of a Business Account?

I saw that another poster has had problems that may be partly due to not upgrading to a Business Account, but I will only be putting on a small volume on, if I ever get round to doing something. Also I have honestly over 100 books that I want to get rid of, all read or bought to read as a personal treat by me or OH, to put on and stuff bought for own personal use and then sold on isn't (I believe) trading. Would this complicate things? I am aiming in the next 18 months to downsize from four bedroom house to two bed, so loads of personal junk to get rid of.

I am well aware that many of the posters here are professionals and I am no way trying to imply that I have the ability or nous that they have, but I do hope that someone could tell me their views of the pros and cons of a Business Account. I have no ambition to be a powerseller. It would just be nice to up my income a little if it is possible.

Any advice really gratefully received.

soolin

As soon as you buy to sell you are a business, you don't need to change your account before that time. If you are only selling your own old books or unwanted stuff then that is fine and you can stay a personal/private seller as long as you like. If however you bought anything (I for instance buy second hand books to resell) then you are a business and need to declare yourself as such both with ebay and HMRC.

There is often a misunderstanding about the requirement to register with HMRC especially where used goods are concerned. Many people buy for instance at car boot sales or in charity shops and fail to declare that as a business. However, other ebay users, plsu HMRC are not daft and anyone regularly selling huge amounts of stuff all apparently from their own cupboards is going to look suspicious.

As a business you will pay tax and NI if applicable.

hev_2

I'm too honest for my own good - I'm the sort that if I don't register 50p profit I would imagine all the policemen I passed would be looking at me:rolleyes:

So if I did buy to re-sell then I would want to do it all above board.

I genuinely do have a shed load of my own stuff to sell, me and OH are both book a holics. I am honestly confident that I have over 100 books that we have accumulated over the years and that I want rid of. They have all been bought for our personal use. Then there is the Heroes DVD that we have watched two episodes of and the glass giraffe that my father thought was a tasteful gift... I also have a little boy coming up to two and during an incredibly stressful first year I bought clothes for him as a comfort thing - I have stacks of stuff, mostly from ebay in the first place. A lot of it is in really good nick and it would be a shame to bin it. When I worked in a charity shop (six years ago) kiddies clothes didn't sell, so I wouldn't automatically take kids' clothes to a charity shop.

However I will certainly declare anything bought to sell, and if I am supposed to upgrade to a Business Account for that then I shall certainly do so. I just wondered what the difference was from a personal account.

hev_2

btw sorry for rambling posts - touch typing and lack of adult company have a lot to answer for

hev_2

Also - really appreciate the advice Soolin. I'm sorry I didn't thank you properly earlier.

RFW

The difference between business and personal in simple terms.

Selling stuff you already own = personal

Buying/making stuff to sell = business

I haven't been in Makro for a while, but can't see that buying from them to resell would be at all profitable.

hev_2

RFW wrote: »

The difference between business and personal in simple terms.

Selling stuff you already own = personal

Buying/making stuff to sell = business

I haven't been in Makro for a while, but can't see that buying from them to resell would be at all profitable.

Some of the stuff would make no profit at all! There may be one or two things that may make pennies profit.

Apart from any money I make, if I do not do something with my day I will need medication! I can take the pushchair to Makro, have a cuppa in the cafe which may wipe out any profit and tootle home. At least there will be some purpose in the day, however. I certainly am not aiming to be an amazing business woman, I just want to try and get a life!

I'm a bit concerned that I will be selling a mixture, so I may put the wonderful world of Makro on hold.

However, I really appreciate the advice given here, it is really helpful.

soolin

basically a business and a private account run exactly the same, you wouldn't notice any difference day to day. The only difference would be that for a business you would need to keep very basic (and I mean very basic) accounts. For instance I have a loose leaf folder, i add up all the payments outwards I make (so all the receipts for books bought etc) then on another page I list all my expenses, post, packing expenses etc. Then a third page is just for income received. Then I basically take expenses, plus purchase costs from my income and declare that. I used to over complicate it and have very long proper accounts (I was an accountant in my pre child days) but my business advisor told me that three lines are quite sufficient on my tax return.

Oh yes, when you register with HMRC you will probably be offered a business workshop and an advisor you can call for free if you want to.

I actually sell more than books, but it is easier, for the purpose of this conversation to refer just to books, you will find that many people are reluctant to share their success stories in case of competition.

Might I suggest that rather than new goods which can be difficult to source cheaply enough, and you won't do that at places like Makro, that you find a niche. If you have a hobby, can you source items connected with that, if you have any previous interests, can you use that to source specialist goods? Lots of people also make money buying second hand prams, or even designer clothes (but you would need to know what will sell) from charity shops or car boot sales. I also knew someone who concentrate dmainly on early games consoles and games..sometimes you can pick retro stuff up cheaply enough to turn a profit. Just choose something that you know and give it a try.

lastly, you can have two accounts if you prefer, one for business and one for private. The business one will be subject to the Distance selling regulations and you will need to show your address and returns policy, whereas you don't need that on your private one. This weekend it is free listing on ebay for items with a start price of 99p but only for private sellerss, you could give that a try and see how you get on.

Also, check out the Amazon thread for books, that is quite addictive!

Good luck.

hev_2

Thank you so much for this, Soolin.

Your post has been really helpful. I am in considerable awe of anyone who can manage accounts but in pre-child days I could balance the books where I worked at a section level.

I shall see how things go, find my niche, see what happens, but the Makro stuff, although unlikely to do more than cover expenses, means that I regularly take me and DS out for a walk, and the rest I shall see how it develops.

Thank you for your help on this. I really appreciate it.

People on MSE are brilliant!