Ebay as a part time job?

gilly41

Hi
I am thinking about selling second hand clothes on ebay---I have sold most of my clothes that I no longer need and quite a lot for my SIL. I am now wanting to sell as an income---only part time(purchasing from Car Boots and Charity shops)--but I was wondering how I go about it re tax purposes and NI contributions. I dont work at present so I am not paying tax or making any NI contributions.
Thanks for any help.
x

gilly41

Anybody?
x

Crazychik

Hi Gilly, sorry no advise at the present regarding this apart from, have you rung Inland revenue up for their advise what to do.
You will have to be classed as self employed ( i think) and register with the vat man (depends on how much you earn I would imagine) Sorry Im not much help, try the inland revenue 1st and take it from there

cazmanian_minx

Give the Self Employed helpline a ring on 08459 15 45 15.

It's fairly straightforward. You'll start getting bills for Class 2 National Insurance contributions, at £27.30 (off the top of my head, it's early!) every 3 months. You can set up a direct debit to pay these weekly, monthly or quarterly. However, if your expected profit for the year is less than £4,200 (again, off the top of my head, they'll be able to tell you the exact figure), you can apply for a small earnings exemption which means you don't have to pay the NI.

Come the end of the tax year, the Inland Revenue will write to you and ask you to fill in a tax return. I submit mine online and it takes about half an hour. You'll need to keep accurate records of what you spend on the business throughout the year - how much money you've taken and then all your costs (eBay fees, Paypal fees, postage, cost of the clothes themselves - try and get receipts from the charity shops and car boot sales if you can, even if it's only the seller signing a slip you've printed up in advance with blanks to fill in the price and item description).

The IR then calculate how much you owe them in tax and class 4 National Insurance (if anything) and you pay up.

You have to register as self-employed within 3 months of starting to trade, otherwise they can fine you. The people who man the helpline are very patient; I was totally clueless when I first started and they sent me a couple of very helpful books and leaflets, free of charge.

Good luck!

Caz

windswept

hmrc also do free workshops , usually at your local tax office, I am doing one next week, on self assessment. It all seems very daunting at first but it is really quite straightfoward. even easier for you as you don't have an employer as well. me and hubby are self employed as well as employed, we got a certificate of exception so don't pay any extra n.i. as we don't expect to make much before april. the hmrc website is very helpful, as is the business link one. the most important thing, I think, is to keep scrupulous records of absolutely everything, the taxman requires this even if they never check, one day they might! good luck.:beer: if you want to pm me, I can go through what we did step by step as it is all very recent (october).

gilly41

Hi
Thanks everyone for your advice. I have rung the helpline this morning and they were very very helpful. I need to get started up and then get back in touch with them in the New Year to register.Can I just ask regarding keeping records---do I need to write down the ebay fee for each item I sell(ie a blouse I buy for £1 is sold for say £4..99)Do I need to write down how much ebay charged to list it and the amount they charged as commission or do I do a weekly ebay fee ?
Thanks again everyone

cazmanian_minx

gilly41 wrote:

Hi
Thanks everyone for your advice. I have rung the helpline this morning and they were very very helpful. I need to get started up and then get back in touch with them in the New Year to register.Can I just ask regarding keeping records---do I need to write down the ebay fee for each item I sell(ie a blouse I buy for £1 is sold for say £4..99)Do I need to write down how much ebay charged to list it and the amount they charged as commission or do I do a weekly ebay fee ?
Thanks again everyone

It depends how detailed you want to be really. If your turnover is below £15,000 (that was the figure on my 05/06 tax return, it may change), all the Inland Revenue need on your tax return is 1 figure for your turnover and 1 figure for your expenses allowable for tax - i.e. ebay fees, paypal fees, cost of goods, postage, packaging, petrol allowance for going to car boot sales, proportion of monthly internet and phone charges etc. etc.

I have a cashflow spreadsheet and a profit & loss spreadsheet for each year.

The cashflow spreadsheet has the months down the first column, then there's a column for 1. stock purchases 2. eBay fees 3. Paypal fees 4. postage 5. packaging 6. other expense 7. income. After the end of a month, I download my sales history from Paypal for the month which gives the income (remembering to add on any cheques/postal orders received) and Paypal fees figures, then download my eBay invoice for the eBay fees. I chuck receipts for stock purchases, postage, packaging and anything else into a box throughout the month; they get sorted into categories, added up, entered into the spreadsheet and then all the paperwork for that month goes into a plastic pocket in a lever arch file.

This makes it really easy when it comes to year end and I do the profit & loss for the year. The total of the income column is turnover for the year. Stock is calculated by taking opening stock from the previous year's P&L (or £0 if you're starting up), adding the total for the stock purchase column and then minusing off the value of stock you have on hand, i.e. unsold. Minus off the other expense columns and bingo, you have your profit (or loss, but hopefully not!) for the year.

When it comes to tax return time, whack the turnover number in, add up all the expenses from the P&L, whack that in, and the Inland Revenue will do the rest for you :beer:

Caz

windswept

I have folders for everything, including, all business expenses such as receipts for everything bought solely for the business, i.e. packing materials and goods to sell (even printer ink and paper). all postal charges, monthly ebay and paypal fee invoices (automatically generated by them), all copies of ebay invoices for items sold, for my own convenience I write ebay and paypal fees and postage on these. I bought an accounts book for weekly accounting and to help with yearly self assessment. It will help if you have a separate bank account for your selling as well. it's really easy when you only sell on ebay, my accounting is a little more complicated as we sell on ebay plus at toy fairs, markets and outdoor events and deal with suppliers etc. once you get into the habit of record keeping it gets easier. if you have any other questions, please ask.

cazmanian_minx

Oh, forgot to add - Ecal:

http://ecal.!!!!!!/en/fee_calculator/ebay.co.uk/

- absolutely INVALUABLE for working out how much you need to sell something for to make a profit, it works out Paypal fees and everything!

Caz

Snooze_Control

Am I reading this right? You want to sell some old clothes on Ebay and you're worried about tax and NI ?!!! Trust me, you don't worry about stuff like that on Ebay! I've been selling on Ebay for over 3 years and have nearly a 40,000 feedback score (that should give you a good idea of what sort of money I'm turning over) and haven't paid a penny to Brown's pie fund! If you need to pay tax, the tax man will let you know himself. Meanwhile, you just carry on regardless!

SC

Slartibardfast_2

Oh dear snoozecontrol.

Not a very helpful post from you there.

If you're making so much money out of Ebay and Tax Evasion what the heck are you doing posting on MSE?

Seriously, 40,000 feedback in 3 years = trader.

Please don't advise people on MSE to break the law. The OP has stated that they do not currently pay Tax or NI and wish to do so. Don't knock their honesty.

I do sell personal items on Ebay and have considered trading ebooks (legit ones) and other items in an Ebay shop but have not bothered as yet because of the time required to set things up in a proper and legal sense.

Good luck to all those of you who are trading and paying your dues.