please help me with the 'official' side of things

Sid_Wolf

as i mentioned in another thread recently, I have been making and selling made to order dog products, mainly via pet forums and facebook (I put one of the products up on ebay today, but no buyers as of yet!)

I've been selling them for around a week and a half, and its doing well :jpeople love the idea and the products, which is fab. BUT, im not very 'businessey', I can make and sell them easy, but its all the offical stuff Im no good at

1st off, im not sure I can call it a business yet, considering i've only been selling for the short time I have, is it considered a business as soon as you make a profit?

2, what do i do about tax and stuff? I've taken around £200 since I 1st started selling, and about 1/2 of that has been profit, the other 1/2 has gone on supplies.

I know I need to declare any earnings to the tax man, but I dont want to register as self employed until I know that it will keep going, and that the sales im doing arent just a beginners rush sort of thing 'ohhh look at the pretty collar, lets get one!'. I know I'm going to need to expand my selling platforms to continue to hit a good sale level, as theres only so many members on a forum! Listing my other products on ebay is my next step

Is it ok to wait a couple of months before registering and declaring these earnings?

3. at what point should I consider quitting the day job? :rotfl: lol im mostly joking here. tho it would be great if I could, the earnings this week are about the same as i earn a week working my part time job!

paddyrg

1) Businesses can make losses too ;-) You're selling stuff you make to the public, you're a business.
2) Keep records religeously. 'About £200' and 'about 1/2 of that profit' are not good enough for the taxman. Keep records in a spreasheet or on paper, everything you make and spend, and then you will know *exactly* what your profit is on a collar, exactly what to declare in tac, etc.
3) Day job? Quit as soon as you can sustain yourself and save a bit on top!

Sid_Wolf

paddyrg wrote: »

1) Businesses can make losses too ;-) You're selling stuff you make to the public, you're a business.
2) Keep records religeously. 'About £200' and 'about 1/2 of that profit' are not good enough for the taxman. Keep records in a spreasheet or on paper, everything you make and spend, and then you will know *exactly* what your profit is on a collar, exactly what to declare in tac, etc.
3) Day job? Quit as soon as you can sustain yourself and save a bit on top!

haha yea i have it all in a document (and paypal!) i just couldnt be bothered to put it in this thread just wanted to give a general idea

Thanks for replying

paddyrg

Sid_Wolf wrote: »

haha yea i have it all in a document (and paypal!) i just couldnt be bothered to put it in this thread just wanted to give a general idea

Thanks for replying

Good stuff! Tax will be on your profit, which you will put on your tax return, so remember to keep all those receipts to offset against profit!

Savvy_Sue

I'm not sure you have much to lose by registering as self-employed now, and if you leave it too late then HMRC could impose a fine.

Assuming you expect your profit from self-employment to be less than about £6000 in your first year, ask about a Certificate of Exemption from paying NI. Otherwise they'll require you to set up NI payments, which give you no benefit if you're paying them through PAYE. (Note, you say you work p/t, so are you paying NI?)

Then you'll get a tax return, on which you put details from your P60 from your employer, plus your self-employed income. Not rocket science.

Sid_Wolf

Savvy_Sue wrote: »

I'm not sure you have much to lose by registering as self-employed now, and if you leave it too late then HMRC could impose a fine.

Assuming you expect your profit from self-employment to be less than about £6000 in your first year, ask about a Certificate of Exemption from paying NI. Otherwise they'll require you to set up NI payments, which give you no benefit if you're paying them through PAYE. (Note, you say you work p/t, so are you paying NI?)

Then you'll get a tax return, on which you put details from your P60 from your employer, plus your self-employed income. Not rocket science.

No i currently dont (just recently changed jobs and dont yet earn enough to warrent it)

I suspect it will be less than £6000, what if it does go over? do i then have to pay NI from the date it clocked over the £6000?

Savvy_Sue

Sid_Wolf wrote: »

No i currently dont (just recently changed jobs and dont yet earn enough to warrent it)

I suspect it will be less than £6000, what if it does go over? do i then have to pay NI from the date it clocked over the £6000?

That's what I'm not sure about, but if you're not likely to pay NI in your employed job, then it's more worthwhile to pay it for self employment.

InsideInsurance

It doesnt matter if it does well or not or if you intend to continue or not. What you are doing is legally a business and as such in your current setup you must register yourself with HMRC as self employed immediately giving them the date from which you commenced. Failure to register within the time limits there are fines to be paid. Its quick and easy to do http://www.hmrc.gov.uk/sa/register.htm or alternatively you can do it over the phone.

As your currently not paying NI it is worth making the class 2 payments simply as it will enable you to get a state pension etc when the time comes.

You will need to do a tax return once a year and on that you will declare all your income from both your employed and self employed life and all of your allowed self employed expenses (plus the taxs already paid under your employed life). They will then inform you what tax you need to pay (or are entitled to as refund).

As you are making and selling products you also need to firstly check your home insurance, this will most likely exclude this and potentially also the likes your computer as it now has business use.

Secondly you should consider also buying product and public liability insurance. I'm sure its unlikely but if someone who bought your product claimed it was responsible for killing their pedegree rare breed dog there could be fairly costly legal action that you'd need to defend if you didnt have insurance.