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

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Comments

  • soolin wrote:
    Technically as soon as you started selling goods for profit, as opposed to stuff you happened to find under your bed (I mean books and old Cds tsk tsk), you were trading. The Revenue do not have lower limits for declaration.

    I thought there was an allowance below which you didn't have to pay Income Tax (About £5000 IIRC)? Or do you still have to declare even if you won't end up paying tax?
  • I think for me the accountant talk would be a wise move ! Thanks again Soo.
  • soolin
    soolin Posts: 74,307 Ambassador
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    I thought there was an allowance below which you didn't have to pay NI (About £5000 IIRC)? Or do you still have to declare even if you won't end up paying tax?

    There is a difference between taxable limits and declarable limits. Everyone has a tax allowance, which is deducted from all earned and unearned income, plus *some* benefits before tax is applied. However, even if your self employed income is less than your allowances you are required to make a declaration to the Revenue, although no tax will be payable. if you already have a job then any additional income will be fully taxed as your allowances will be used against your main income first.

    This is quite interesting;

    http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/01/06/cmonline06.xml

    Derek Levy, partner at Hacker Young, said: "It is unlikely to occur to the casual trader, who dabbles a bit at Christmas, to register with HMRC.

    "But whether the trader is under the taxable threshold is irrelevant – and this is where people will get caught out
    .

    Edit: it also says this:

    "They have undercover tax inspectors posing as buyers."

    Here is the official HMRC info:

    http://www.hmrc.gov.uk/guidance/selling/index.htm
    I’m a Forum Ambassador and I support the Forum Team on the eBay, Auctions, Car Boot & Jumble Sales, Boost Your Income, Praise, Vents & Warnings, Overseas Holidays & Travel Planning , UK Holidays, Days Out & Entertainments boards. If you need any help on these boards, do let me know.. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.All views are my own and not the official line of MoneySavingExpert.
  • soolin
    soolin Posts: 74,307 Ambassador
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    Sorry, I'm on a roll now!

    National Insurance actually kicks in before tax..and here are the details:

    http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/DG_4015904

    If you're self-employed
    you pay 'Class 2' NICs at a flat rate weekly amount of £2.10
    you also pay 'Class 4' NICs as a percentage of your taxable profits - you pay eight per cent on annual taxable profits between £5,035 and £33,540 and one per cent on any taxable profit over that amount
    if your earnings in the 2006-2007 tax year are expected to be less than £4,465 then you may be entitled to the Small Earnings Exception (SEE), meaning you don't have to pay any Class 2 NICs - you can apply for SEE for the 2006-2007 tax year on form CF10
    I’m a Forum Ambassador and I support the Forum Team on the eBay, Auctions, Car Boot & Jumble Sales, Boost Your Income, Praise, Vents & Warnings, Overseas Holidays & Travel Planning , UK Holidays, Days Out & Entertainments boards. If you need any help on these boards, do let me know.. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.All views are my own and not the official line of MoneySavingExpert.
  • soolin
    soolin Posts: 74,307 Ambassador
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    I promise I'll stop now!

    These are the *current* tax allowances referred to by nightswimmer:

    http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/DG_4015583
    I’m a Forum Ambassador and I support the Forum Team on the eBay, Auctions, Car Boot & Jumble Sales, Boost Your Income, Praise, Vents & Warnings, Overseas Holidays & Travel Planning , UK Holidays, Days Out & Entertainments boards. If you need any help on these boards, do let me know.. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.All views are my own and not the official line of MoneySavingExpert.
  • arushofblood
    arushofblood Posts: 1,073 Forumite
    I'm so bad at all this ! My mind just doesn't take in all this complicated stuff ( complicated for me that is ) My eye's skim over it all....Aaarrgghhh I hate it ! Guess it's something I need to get used to though..... I'll put the kettle on...
  • soolin
    soolin Posts: 74,307 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    I find a chocolate biscuit helps as well!
    I’m a Forum Ambassador and I support the Forum Team on the eBay, Auctions, Car Boot & Jumble Sales, Boost Your Income, Praise, Vents & Warnings, Overseas Holidays & Travel Planning , UK Holidays, Days Out & Entertainments boards. If you need any help on these boards, do let me know.. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.All views are my own and not the official line of MoneySavingExpert.
  • arushofblood
    arushofblood Posts: 1,073 Forumite
    No worries by me Soo ! You're a great help for pointing me in the right direction ! Thanks again .... *mutters* even if I don't really want to know all this, I guess I have too....;)
  • arushofblood
    arushofblood Posts: 1,073 Forumite
    soolin wrote:
    I find a chocolate biscuit helps as well!

    Noooooo ! I'm so easily tempted, don't say that, lol. One leads to two... three... and so on :D

    Unless I can offset the cost that is ? ;)
  • soolin
    soolin Posts: 74,307 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Noooooo ! I'm so easily tempted, don't say that, lol. One leads to two... three... and so on :D

    Unless I can offset the cost that is ? ;)

    When I used to be a tax accountant (which I haven't been for many years), it was quite common for clients to give me receipts for everything!

    So, they will have been to makro and bought office chairs, or stock or whatever and give me the bill for £800, but when I checked it I would find they'd all bought their Christmas booze, or a pallet of biscuits for the office and expect it all to go through as an expense. Garage receipts were also a problem as many clients would think nothing of buying fuel every day (which was claimable) but then expecting the cigarettes, sweets and drinks bought at the same time to go through on a nod as well!

    I'm strict me.

    Soo
    I’m a Forum Ambassador and I support the Forum Team on the eBay, Auctions, Car Boot & Jumble Sales, Boost Your Income, Praise, Vents & Warnings, Overseas Holidays & Travel Planning , UK Holidays, Days Out & Entertainments boards. If you need any help on these boards, do let me know.. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.All views are my own and not the official line of MoneySavingExpert.
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