Tax discussion -was -At the risk of being flamed !!

baffcat

cafenervosa wrote:

am I right in thinking P&P from buyers is counted as turnover or is that classed as something else?

soolin wrote:

It's turnover as it is amount received, that's why it gets so easy to start creeping up on the VAT threshold.

Eaxactly as Soo says. Where I originally said it was turnover, that means ALL business income. Any money that arrives in your bank account, on your credit card account, in your pocket, through trading to another person or business, counts towards turnover. That's why I update my spreadsheets with every daily totals every morning, so I'm not going to be caught unawares.

If you sell something privately, that wouldn't be counted as business income, and doesn't fall into turnover. But I keep any such income completely separate from my business trading. All my income from sales goes to one account, and is on my spread sheets. Anything like Christmas or birthday presents, or income tax refunds (as if!) goes into another of my personal accounts.

As I'm self-employed rather than a limited company, I account for expenses on my spreadsheets by way of receipts, invoices, and what are in effect 'petty cash vouchers' that I write to keep track of sundry expenses. This way, I can spend directly from my 'business' account for anything I like, as it's only the credit side of the statement that concerns the taxman.

My accountant gets every household bill I get, and I let him work out which of those, and how much, I can claim as an expense. As I think AP said, he's worth what I pay him in tax savings alone.

HTH

Baff

arushofblood

Me again !!!

Just having a weekend without the kids and sorting out *loads* of paperwork including all this tax stuff ! Having not been involved in *any* paperwork during my ex-marriage, this is quite an eyeopener at times !

Anyways, I was just filling out my form for registering as self-employed and whilst hunting through the my files for my National Insurance Number I came across all the paper work that related to a property that the ex and I used to rent out, including the old Self Assessment forms. These are in my name, but the ex-hubby always completed them ( good for something then .

So, does that mean that I am already registered as self employed and that I will just start declaring the Ebay tax when I next have a Self Assessment form through ?

I've come across some other paperwork too which questions whether I am paying enough National Insurance contributions. This too suggests that I'm already registered then ?

Sorry about my uncertainty with all this... I really didn't have anything to do with paperwork whilst with my ex and would rather not have him involved now !

Ooo, I luuuuuv being independant

Thanks

baffcat

arushofblood wrote:

Me again !!!
So, does that mean that I am already registered as self employed and that I will just start declaring the Ebay tax when I next have a Self Assessment form through ?

I've come across some other paperwork too which questions whether I am paying enough National Insurance contributions. This too suggests that I'm already registered then ?

'Lo

Your best bet is to contact your local office and ask them. Works for me every time. Would also be the opportunity, if you aren't registered as self-employed, to get the forms to do so, and to get confirmed whether or not you are paying enough NI.

Also, if you aren't sending them £20 or £30 a quarter already, you probably aren't registered. But as I say, ring 'em and ask 'em.

HTH

Baff

arushofblood

Lol Baffcatt.... the obvious answer eh ? Obviously too obvious for me though Thx though !

arushofblood

What a fab day

Have spent this evening designing logos and webpages for my new Ebay enterprises !

So, can I in effect draw a wage for this time spent and offset it against the tax ? I'd be able to if I used an agency yes ? But as I've done it myself ?

Ooo, questions, questions, questions !

baffcat

arushofblood wrote:

What a fab day

Have spent this evening designing logos and webpages for my new Ebay enterprises !

So, can I in effect draw a wage for this time spent and offset it against the tax ? I'd be able to if I used an agency yes ? But as I've done it myself ?

Ooo, questions, questions, questions !

The simple answer is no, unless you become a Limited Company (and that's a whole other subject). As a self-employed person, any drawings you make are income and taxable. If you'd used an agency, then they'd be expenses, and off-settable against your tax. The agency would then have been liable to the tax.

Gottit?

HTH

Baff

debt23

Hi arushofblood,

Thing is, even if you could do this (which you cant,as baff said), you would still then have to declare the wage you paid yourself on your self assesment form and pay tax on it - so one way or the other, the tax man will get his share.

There are many ways to lessen you tax bill via cross charging from one campany to another, but that can be complicated.

Many self employed persons however, do sometimes 'employ' someone else (the wife) to take advantage of that persons tax allowance.
e.g if you had a OH who was not working, then you pay them. You claim the tax relief for your company, they sumit a self assesment but pay not tax as it is under their allowed tax threshold - you get the idea, but I would imagine I am now telling people how to suck eggs!

I should also point out, that you are only allowd to claim to have 'employed' such a person if they actually did the job, and you cannot pay them above the going market rate for the service they provide!

All the best

debt23

rare_stuff

Just heard an interesting program on moneybox (radio 4) in regard to investigating "e-traders" links at the bottom.

They claimed to have created a search engine type program to be able to crawl the web to look at traders activities, not just on ebay, and to compare details with records they have. They did state that they will not be chasing up the casual seller, but anyone who appears to be selling 'professionally' will be investigated if they haven't already registered as having a form of self employment.

here's a link to the moneybox page where you can listen to the article
http://news.bbc.co.uk/1/hi/programmes/moneybox/6349861.stm

here's a list to the HMRC guidelines with relevant help and advice links.
http://www.workingforyourself.co.uk/etraders/default.htm

Tigger36

Can anyone give advice on the 'running a business from home' situation? Is it right that you're liable to pay business rates or a much higher rate of council tax? It can also affect your mortgage and insurance. Every time you get an insurance quote they ask if there is a business being run from the house. I've just re-mortgaged and I was asked the same question. I'm only selling personal items so the answer was no but it has certainly put me off the idea of trading.

Contains_Mild_Peril

Tigger36 wrote:

Can anyone give advice on the 'running a business from home' situation? Is it right that you're liable to pay business rates or a much higher rate of council tax? It can also affect your mortgage and insurance. Every time you get an insurance quote they ask if there is a business being run from the house. I've just re-mortgaged and I was asked the same question. I'm only selling personal items so the answer was no but it has certainly put me off the idea of trading.

I've been told (this is in Scotland, might not be the same throughout the UK) that your home only incurs business premises expenses (e.g. rates) if you have at least one room used solely for business purposes, so if the room from which you conduct your business is also used for other (ordinary residential) purposes, you're OK. It could still affect insurance premiums though.