Becoming a business seller

interlcore

I'm looking to sell some handmade items on eBay. I don't expect to earn too much from these items (I will be under £5000pa) and will be my only income. I can see that I will have to change my private account to a business one. At the moment I have 2 accounts. 1 is for selling my items and the other is to buy things to make my items and personal buying. Both these eBay accounts (and when I complete surveys) are linked to the same Paypal account. Is this okay or will it confused HMRC?
HMRC - what do I have to tell them/show them of my selling and buying? Will I not pay NI or tax? Should I tell them I'm going to be selling before I list anything or wait for my 1st sale? I've never done anything like this before so I am very in the dark.

soolin

Phone HMRC and register as self employed and while you are on th ephone talk through it all with them. They can be surprisingly helpful.

AS for ebay, you can have as many accounts as you like and up to 8 can be linked to the same paypal account I am rather old fashioned and keep hard paper copies of my weekly or monthly sales and just tot them up each year when I do my tax return. Then take off all my expenses to give a net income.

If you have no earned income at all and nothing that uses your taxable allowance (like certain benefits etc), you will still need to declare your income but will pay no tax. Check with HMRC about the position with NI as you may still have to pay that.

alx2010

I find the HMRC website very easy to navigate so check there.
I am self-employed and pay class 2 contributions (£2.50/week)
If your profits are expected to be less than £5,315 you may not have to pay Class 2 National Insurance contributions but this may affect benefits later on.
If you have a high profit you would have to pay class 4

interlcore

Thanks for replying. I have bought some materials months ago and have lost receipts. How does this work out regarding profit/loss as I have no evidence?

DaveAshton

interlcore wrote: »

Thanks for replying. I have bought some materials months ago and have lost receipts. How does this work out regarding profit/loss as I have no evidence?

In a way, HMRC won't mind it that way round. If you don't put some of your expenditure on your accounts, it'll make your overall profits higher as far as they can see.

Obviously, you're taxed on your profits, so you may end up paying more tax than you're meant to.

kronenbourg

I have recenty become a business seller all because i am selling to much stuff , i collected postcards since childhood and am selling them off week by week and probably sell 75-100 making £100-£150 a week
would i have to declare this as earnings though , i am selling my own items but am registerted as a business seller
not sure what to do as dont want to get into trouble

theonlywayisup

kronenbourg wrote: »

I have recenty become a business seller all because i am selling to much stuff , i collected postcards since childhood and am selling them off week by week and probably sell 75-100 making £100-£150 a week
would i have to declare this as earnings though , i am selling my own items but am registerted as a business seller
not sure what to do as dont want to get into trouble

If you have bought or made something to resell specifically then you are a business and should register with HMRC.

Sometimes Ebay and HMRC definitions of 'businesses' are quite different.

If you are selling items you did NOT buy/make to sell, even on a business account, then you are not liable to HMRC.

macfly

interlcore wrote: »

Thanks for replying. I have bought some materials months ago and have lost receipts. How does this work out regarding profit/loss as I have no evidence?

HMRC would accept that you had to buy materials as it's that sort of business, and businesses do lose receipts. It makes sense as they would not let you omit sales if you lost the sales receipts.
If you can remember what you paid, just write it down as an expense

kronenbourg

theonlywayisup wrote: »

If you have bought or made something to resell specifically then you are a business and should register with HMRC.

Sometimes Ebay and HMRC definitions of 'businesses' are quite different.

If you are selling items you did NOT buy/make to sell, even on a business account, then you are not liable to HMRC.

cheers for the answer , i am basically selling my collection but i didnt buy it to sell its just i need the space/money
same goes when i eventually start selling my vinyl and cd collection