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

JohalaReewi

And just appeared on the BBC website...

http://news.bbc.co.uk/1/hi/business/6354003.stm

Snooze_Control

JohalaReewi wrote:

And just appeared on the BBC website...

http://news.bbc.co.uk/1/hi/business/6354003.stm

:rotfl:

More scare-mongering.

SC

pinky8

Does anyone have a spreadsheet template that I can use for my accounts as I need to get my accounts in order. I have tried to make one myself but I don't know whether it is right.

Thanks in advance,

xxx

mustrum_ridcully

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.

Chances are that if you are selling the odd personal item you're fine, once you start running it as a business things will change.

If you do want to run a business from home there is also the issue that deeds (or tenancy agreement) for a property may have a covenant that prohibits you from running a business from that property. I don't know what could happen to you because of a covenant in the deeds (I guess it would have something to do with planning permission) but if it was a clause in a tenancy agreement then you could probably be evicted.

Golden_Calculator

As a Chartered Accountant and Chartered Tax Adviser its been interesting to spend 1/4 hour reading this thread.

I cannot recommend strongly enough that you take professional advice if you think you may be trading on ebay. It has been stated above already that the fees you will incur in taking professional advice will quickly be covered by the suggestions and advice that you will be provided with.

As an example , the above thread has more recently mentioned the position regarding claiming expenses for working at home. HM Revenue and Customs have recently issued specific guidance which is beneficial to those individuals who work from home (and is therefore relevant to ebay traders). The guidance you can be provided with will actually save you money by maximising the claims you can make against your income whilst not exposing you to any risk should the Taxman ever enquire into your affairs.

Young qualified accountants are available who actually use ebay and understand the issues facing you as well as being able to advice on all the tax rules specific to you. They wont charge the earth for the advice you are given and they will offer free initial consultations (even via email if you wish).

To find a Chartered Accountant I would suggest looking on the Institute website at https://www.icaew.co.uk. If you would like a free consultation with me please email me at removed by BG

Hoddie_2

HM Revenue and Customs have recently issued specific guidance...

HMRC's recent clarification of their stance here:

If you use part of your home solely for business (for example you use a room or an identifiable part of a room solely as an office), a proportion of the running costs of the home are allowable. These might include a proportion of insurance, heat & light and mortgage interest. If the part of the property used for business purposes is so used for only part of the time, you can claim part of the running costs. Calculate the amount by reference to the time that part of the property is used for business purposes, and the power-consuming equipment used in the business. The deduction should reflect the underlying facts. For example, a potter who uses an electric kiln every day will use far more electricity than a jobbing builder writing up their records in the spare bedroom once a week. If you use part of your home exclusively for business purposes, you may be liable to Capital Gains Tax on that part when you come to sell it.

To be fair, HMRC have generally always accepted such claims but refused to say so in print (they have always skirted around the issue and in one memorable newsletter said such claims would not be allowed).

The industry accepted way to calculate what to claim is as follows. You need to keep in mind that this is not agreed by HMRC, their view will always be that you must show any claim to be reasonable. The following is normally accepted but is not guaranteed.

You can claim a proportion of your gas, electricity, water, rent, insurance, and council tax bills, based on the percentage of your house used solely for business purposes. The proportion is normally taken to be 1/x of the total amount - x being the number of rooms in the property minus any bathroom/toilet room. You can also claim other expenses in full if they're incurred 'wholly and exclusively' for the business, such as the costs of a dedicated phone line.

HMRC rarely accept that the cost of internet is a business expense unless it is used solely for the business. This is because the cost would be the same if you were using it just for personal use or both personal and business use (the same can normally be said for rent but they allow that...).

There are some steps you can take to prevent having to pay business rates, the main one seems to be that you ensure you're careful not to 'separate' the residential and business areas of your property. To clarify, it's okay to use a room within your house but it might be risky to use a granny flat or a separate building (such as a converted garage or purpose built external structure). It would also be risky to engage employees to work at the premises (except perhaps a cleaner).

It is always best to get professional advice if you can, but I imagine many here will be able to work out their own reasonable claims using the above information. I would stress that if you're unsure whether or not you'd be liable for business rates, always seek advice.

customswolf

Snooze_Control wrote:

:rotfl:

More scare-mongering.

SC

I work for HMRC, and I can tell you it's not just scare-mongering.....

Stuart_P

customswolf wrote:

I work for HMRC, and I can tell you it's not just scare-mongering.....

what is being done to promote this then? i sell on ebay & today is the first time i have seen the bbc article & the subsequent link to the hmrc. if it really is being pushed why haven't i seen it til now?

Snooze_Control

customswolf wrote:

I work for HMRC, and I can tell you it's not just scare-mongering.....

Yeah. Whatever. Just like it's not been scare-mongering for the past 7yrs that I've been on Ebay and nothing's changed in that time. Tell us another joke eh.

SC

nightswimmer

Stuart_P wrote:

what is being done to promote this then? i sell on ebay & today is the first time i have seen the bbc article & the subsequent link to the hmrc. if it really is being pushed why haven't i seen it til now?

Dunno?

There have been many TV adverts about Tax evasion, etc. since the start of the new year. During January these adverts were on many times a day across several channels, and although admittedly not specifically to do with eBay, should have been enough to make people question whether their income should be declared.

During January there were also articles in the press about the tax man wanting to clamp down on eBay traders, etc. See the link Soolin provided in post #14 of this very thread for example.

The new website/guidelines were launched a couple weeks ago and again there have been many reports about it in various on-line and real world media. It too has also been talked about on here. *cough*

http://forums.moneysavingexpert.com/showthread.html?t=373115