e bay tax

jane_sanderson

Hi,
I registered as a small buisness with the tax man last june as I was buying items from jumble and car boot sales and selling them on e bay. I did quite a bit to start with, but then changed fulltime job hours, so things have dropped off a bit since november. So far I have sold about £500 worth of stuff. Can anyone who is already doing this please give me guidelines as to what sort of accounts I have to prepare. I have been self employed before, so I am aware of the sorts of expenses that can go against tax, but which is the best way of recording sales, apart from printing out my entire sellers account. Thanks-gratefull for any tips-Janewannabeamillionaire.

cazmanian_minx

If your turnover is under £15k, all you need for your self-assessment form is turnover, allowable expenses and profit (the first minus the second). Once you go over that figure they want a bit more detail.

Caz

jane_sanderson

Many thanks-Don`t think I`ll ever reach the dizzy heights of 15k turnover but here`s hoping.:jjanewannabeamillionaire

blue_monkey_2

I am registered self employed - I take all of my income details from Paypal, this is because the payment sin sometimes differ from the invoices sent, some people add things on, sometimes Selling Maganer messes things up -I have one now were someone has bought 2 items, they have been sent a combined invoice and have paid me £33.00 but my Selling Manager is showing 2 things as sold both total £33.00 with postage so insitead of a sale of £33 it sdays £66 which is incorrect.

You can get a weekly/monthly report from Paypal which shows how much you have been paid into your account - this is your income, your fees are an expense so don't get this wrong (as I did in the first few months and it took ages to sort out). You can export it into a spreadsheet so it takes little time to prepare and the figures are all in front of you.

Also, any cheques/PO that you are paid I use the same principal, they get paid into my personal account (my company account charges me 58p per cheque) and I keep a Sales Journal for other payments and these are all put through into my books as income at the end of the month also.

The only thing about buying from Jumble Sales and the like is that you have no proper receipts so there may be an issue of these being claimed as an expense as you have no real 'proof' what you have paid for without these. Just a thought really incase the tax people ever decide to pay you a visit.

Don't forget that if you alsohave a job you'll be required to declare the extra income on top of your salary and you'll have to pay Tax & NI on this income figure at the end of the year.

Also, the amount of 15K is for turnover which is money in only, not in and out, so if you have money in (not earn) £15k they want more details, this is when it is worth getting a proper accounts programme so everything can be recorded properly - I use Sage as it is easy to use and you can get everythig done it and I get it with my Business Account (for a fee of couse!! Nothing for free when you have a business these days!!)

I hope this helps.

mrsb_5

oh gawd do you need to register as an ebay business with the tax man? I sell quite a bit but it is mostly stuff I have swapped with friends etc, maybe th eodd thing I have bought to re sell......never knew i had to register with the tax man though If I don't register is there any way they could find out lol....I do have a business account on paypal...

blue_monkey_2

If you are buying things to sell on then yes, you need to register as a business and become self emplyed, at the end of eac finiancial year you'l have to 'self assess' and if you work as well, this will also be taken into consideration and you'll have to pay basic rate Tax & NI.

The business account thingon Paypal should not matter I guess but why do you have one if not running a business?

What kinds of things do you swap and how much is their value and why would you sell things you are swapping?

The Tax Man is now very interested in eBay due to the number of people selling. I think they will know those who are not registered for Tax and those that are - I guess they would readily be in touch with eBay for this reason and if you are making high value sales and are not registered then they surely would be interested. If you are selling odds and ends then they probably would not bother as you can sell your own things and not have to declare it. However, depends on what you are selling really and how often to determine on whether you are running a business. Should you be making a £100 a week plus then I am sure they would want to know - no-one can have that many personal effects they need to sell.

And yes, I am sure that if they wanted to know they would find out easily enough, they would only have to buy something. The other thing that you have to be wary off is competitors that are all too ready to grass you up to the tax man if you have better and cheaper things to sell than they have and more customers than them!!

Snooze_Control

:rotfl:

These threads make me laugh. Someone selling a few bits and bobs bought from a junk shop is fretting about paying the equivalent of the price of 2 Mars Bars in tax but yet the rest of us with 5-figure feedbacks just carry on regardless...

The tax man is not interested in Ebay. There are seller's out there with far higher sales than myself that have also been trading far longer than myself and they too have never heard a bean from them either.

Far too many goodie-goodies in this country. :rolleyes:

SC

highguyuk

Snooze_Control wrote:

:rotfl:

These threads make me laugh. Someone selling a few bits and bobs bought from a junk shop is fretting about paying the equivalent of the price of 2 Mars Bars in tax but yet the rest of us with 5-figure feedbacks just carry on regardless...

The tax man is not interested in Ebay. There are seller's out there with far higher sales than myself that have also been trading far longer than myself and they too have never heard a bean from them either.

Far too many goodie-goodies in this country. :rolleyes:

SC

Let us know when you get caught will ya? lol. :rotfl:

Hoddie_2

The tax man is not interested in Ebay. There are seller's out there with far higher sales than myself that have also been trading far longer than myself and they too have never heard a bean from them either.

I can assure you that HMRC certainly do have a policy regards eBay sellers who fail to declare their profits, and are actively working with eBay to bring them to account. You're risking massive penalties (depending on the level of profit), interest on any unpaid liability, not to mention possible loss of state benefits in the future (these depend on you paying the right amount of National Insurance based on your income).

If they ever do knock on your door and you don't have the records to back up what eBay can show you've earned, you're looking at a £5,000 penalty. HMRC also have the power to enforce collection of their own estimate of tax liability, and you'll be unable to claim relief for legitimate expenses if you don't have the receipts.

I would also suggest that it's not such a good idea to admit that you're wilfully evading income tax on a public forum. It is a serious criminal offence that can land you in jail. Many members of HMRC staff frequent this board and it only takes one of them to take it further. Some may even have the authority to do so themselves!

If you are buying to sell, no matter how much profit you make, you should register with HMRC as a sole-trader.

I would also like to make the following observation - the vast majority of people in this country have tax deducted automatically from their income. Why is it fair that you should avoid paying the right amount of tax just because (some of) your income is not taxed at source?

jane_sanderson

I registered for tax because having sold all my own surplus stuff and some effects of a relative, I thought I would be able to run a small pin money income alongside my day job,as well as having a bit of fun I have no problem with paying my taxes and would rather pay `my 2 mars bars worth` than have to worry that if my selling takes off I`ll be brought to account for past sales. sorry if anyone thinks that`s being a goodie goodie- I think thats a bit of a saddo attitude.

N9eav

On a completely different note. I had a friend who worked as a plumber for the council. He lived alone and always worked a few hours each evening jobbing for cash. One day the tax man decided that he should have declared all those £20 jobs and taxed him based on an estimated 20 years worth of out of hours jobs. Cost him £40,000. He had by this time made a few quid and bought 2 houses. One was sold to pay for the tax bill.

I have even been told that they could decide to tax me on all the eggs sales I do from the door. I sell a few dozen eggs a week to pay for the chicken food...... Just as well I make a loss is'nt it? :rolleyes: