Ebay and Tax

aidso

Hi all,

I had a quick scan through the articles and I couldn't quite find what I was looking for. Basically I would like to start selling things via Ebay as part of my hobby. The items I would like to sell are not immediately available to people in the UK so the business could take-off quickly or it could fall on its face.

My question is, if it takes-off do I have to register something with HMRC to pay Tax/VAT for all the sales I made on Ebay? I've been through the HMRC guides for small businesses but they don't relate to Ebay specifically and often imply that I am employing staff..which I won't be.

TIA,
Adrian

soolin

aidso wrote: »

Hi all,

I had a quick scan through the articles and I couldn't quite find what I was looking for. Basically I would like to start selling things via Ebay as part of my hobby. The items I would like to sell are not immediately available to people in the UK so the business could take-off quickly or it could fall on its face.

My question is, if it takes-off do I have to register something with HMRC to pay Tax/VAT for all the sales I made on Ebay? I've been through the HMRC guides for small businesses but they don't relate to Ebay specifically and often imply that I am employing staff..which I won't be.

TIA,
Adrian

Yes you do need to be registered to pay tax and nI and have an ebay business account.

There is some info in this thread with links

https://forums.moneysavingexpert.com/discussion/comment/47120145#Comment_47120145

lincroft1710

You should register with HMRC as self employed if you are buying or making items specifically to sell on, and should do so as soon as you start trading. VAT registration will only be needed if your turnover is £67,000 a year. The medium you use for selling is irrelevant as regards paying either income tax or VAT.

InsideInsurance

Only if you were selling your own items as second hand is it not a business, if your making things to sell, buying to sell etc then that is a business and you need to inform HMRC about it and register for Class 2 NI or claim exemption from it.

aidso

Thanks for this. Was having a wee read of the thread linked too...
Thanks for the indication that £67,000 is the limit. Is the idea behind registering with HMRC so they can take a cut of the profit, or is it for me to claim back extra money from the sales?

InsideInsurance

You tell HMRC that you are self employed so that they send you a self assessment tax return. By filling in this with all your incomings and legitimate outgoings they calculate if you've paid the right amount of tax. If you've paid too much you get a rebate, if you've not paid enough you get a bill.

Normally if you're declaring self employed income then it would be a bill but if you have another income, eg being an employee, then it can be the case that you've been overtaxed there and the rebate for that exceeds your liability. This is most common if you are a higher rate tax payer and making pension contributions through PAYE with your employer but can happen in other circumstances.

Charityworker

I'm thinking of doing this too. I have a question about accounts. When I'm making a note of my incomings and outgoings will a simple cash book do or do I have to hve something more formal? Will the HMRC want to see photocopies of these accounts or will I just have to write the amounts in the box on a form?

aidso

I would say hard copy is the way to do it. Its more legible and it means you have a digital trail with timestamps of all orders etc.

InsideInsurance

You need to be able to evidence your incomings and outgoings and demonstrate they are legitimate business expenses. You normally would keep your receipts and invoices for these and then just log them into something like an excel spreadsheet or cashbook if you prefer paper.

Charityworker

Thanks for that. Also can you have income from a lot of different sources. So for example if I sold on ebay, sang in a pub and got paid, walked someones dog and got paid and cleaned someones house and got paid could these all go into the same cash book and would HMRC have to know that I have 4 different services on the go or would I put them all in the same cash book and just call me 'self employed'. The reason why I ask is that I am looking ahead to april 2012 when WTC is stopped for anyone working under 24 hours. My husband has just been made redundant and I work 16 hours. We are both frantically looking for something 8 hours a week or more but with no luck yet. So if I did 8 hours a week of a mixture of things and logged it all in the same cash book would this count?

InsideInsurance

As long as they are all self employed in nature you can put them in together though for your own records it is normally easier to separate them.

Your Self Assessment form includes all incomes but on that it must be broken up by type, so you can lump self employed together but cannot lump self employed with any employee income.

I cannot help on the benefits question as I fortunately dont have experience in that area