Ebay trading

goodgrief1

I have been trading on eBay since August 2007 and now I have just declared that I am now a business.

I know I am gonna get fined by HMRC for failure to notify within a 3-month period.

What I want to know is how much? ( I know it is 100 pound for failure to notify within the current tax year outside the 3 month period )

What addition fine will it be for the earlier tax year 07/08? Is it a further 100 pounds?

I know I have until Jan 2009 to file the tax return online for the year 07/08.

I just want to be honest with all this and you could say I am looking for a answer from people who work for the HMRC.

I am thankful for all replies.

jet77

Sorry no idea - just wanted to make sure you were aware that you are also liable for Class 2 NI contributions.

supermonkey

when you say trading are you making a decent profit or just selling a few things here and there? something that casual i wouldnt even declare!

soolin

supermonkey wrote: »

when you say trading are you making a decent profit or just selling a few things here and there? something that casual i wouldnt even declare!

Unfortunately HMRC don't see it that way. if you buy to sell you are trading and need to declare it. If you are merely selling your own bits and bobs from aorund the house you are not a trader and don't require any tax notification unless you are lucky enough to hit the capital gains threshold (a Picasso anyone?).

ks62uk

If you are selling your own goods on Ebay then it is not trading. However if you buy items in and sell them on Ebay it is definitely a trade. HMRC had a banner on their website last year pointing this out.

When you get your tax return it may tell you that you have 3 months from when it is issued to submit it which would presumably be after 31 Jan. However HMRC may waive the non-registration fine if you submit your tax return online and pay all the tax due by 31 Jan. Your tax return needs to show the profit from Aug 2007 to 5 April 2008. Depending on your profits, you may also have to make a payment on account for the current tax year. It could be worth quickly working out a rough profit for the current tax year and if it is lower than the last tax year you can claim to reduce the payment on account.

You can claim use of part of your home as office/stock storage area.

HMRC have examples of claiming for using your home as an office at
http://www.hmrc.gov.uk/manuals/bimmanual/BIM47825.htm .
You can claim a proportion of:
Mortgage interest/rent
council tax
electricity
gas
home insurance
general house repairs eg roof, external painting
Specific repairs/decoration to a room that is used exclusively for business.

Alternatively a £2 weekly estimate (2007/08) and £3 (2008/09) can be used.

You can claim capital allowances on equipment and furniture bought for business use in your office.

There is a guide to tax deductible expenses at
http://tips.hrbs.biz/running-your-bu...ible-expenses/. (I haven't found a better free guide yet, anyone know of one?)

You can also claim business mileage to and from post office, bank, office supplies shop etc using the HMRC approved rates of 40p per mile (1st 10k miles per year) and 25p (10k +). If you do this you can't claim any fuel or vehicle running costs as they are covered in the mileage allowance.

Stock - you can only claim a deduction for the cost of stock sold, not for any stock that you have bought and not yet sold at the end of the accounts year. eg if you bought £15k stock in the tax year and sold £12k, only £12k can be deducted against your trading income, the £3k will be included as an asset on the balance sheet (part of the self employment pages) and as an opening stock balance for the next year.