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

arushofblood

Ok, kettle on....

So, and I'm sorry for going on.... if I register myself as self employed and inform the taxman, I would presumably need to provide my Ebay id ? That way my 'start date' and past sales would be trackable and I wouldn't be able to 'get away' with saying that I've only just needed to register ? ( which I thought due to my ignorance ).

Kettles boiled...

soolin

Techically the Revenue don't need your ebay id, not that i would suggest you withold information from them of course.

Can you identify which of your income is based on selling items from profit rather than items from your personal collection? Only, you still won't need to declare any income that resulted in selling your personal items. Most people, even traders start off by selling their own stuff and only change to trading when they run out of personal stuff to sell, so don't over declare.

Soo

nightswimmer

soolin wrote:

I promise I'll stop now!

Hey don't apologise, this is useful information - I only wish the Official websites were as helpful as you.

I was checking into this the other day for a couple friends who are on benefits and selling a few things on eBay just to suppliment their income. Looking at the official sites, we were left with the impression that they wouldn't have to declare as they came *well* below the personal allowance as their benefits are tax-free and they only make at most £10-£15 a week. It's frustrating to think that they could have got into trouble due to lack of clear information.

soolin

Nightswimmer, I cannot answer on behalf of the tax man of course and would not in any way suggest witholding information, but realistically I cannot see them jumping up and down about £10 a week not being declared especially when that still falls below their personal allowances.

However, it is very rare for people in the UK of working age, even those on benefits, not to be using some of their allowances purely because we hope to all live above the poverty line. Pensions etc are all taxable, even the state old aged pension or some disability pension all of which would eat into the allowances.

The other thing to be concerned about is whether the ebay money might impact on their benefits at all. With all the press about benefit cheats the DWP are trying to be seen as cutting down on even accidental over payments, so that might be more worth looking into.

However, total proceeds from a sale does not equate with pure profit, and HMRC are very quick to stop people trying to declare 'income' when in fact accounts would show a loss as that just causes them untold headaches.

steve1905

Relax, there's no room in the the prisons.

mangetout_2

arushofblood, you have a pm

soolin

I've found the special number to call to register as self employed on here:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/WorkingAndPayingTax/DG_10016920

It's important to let HMRC know that you're self-employed as soon as possible - even if you already fill in a tax return each year. If you don't tell them within three months of the end of your first month in business you could face a penalty.

You can register by:

calling the Newly Self-Employed helpline on 0845 9154 515 (open from 8.00 am to 8.00 pm Monday to Friday and from 8.00 am to 4.00 pm at weekends)
completing the form at the back of the leaflet: 'Thinking of working for yourself?'

Also here is a downloadable leaflet:
http://www.hmrc.gov.uk/leaflets/se1.pdf


For people approaching retirement and considering dabbling on ebay this might be useful:

http://www.hmrc.gov.uk/leaflets/ir121.pdf

nightswimmer

soolin wrote:

Nightswimmer, I cannot answer on behalf of the tax man of course and would not in any way suggest witholding information, but realistically I cannot see them jumping up and down about £10 a week not being declared especially when that still falls below their personal allowances.

One would hope.

The other thing to be concerned about is whether the ebay money might impact on their benefits at all. With all the press about benefit cheats the DWP are trying to be seen as cutting down on even accidental over payments, so that might be more worth looking into.

In terms of their income, I think they are both ok (I will get them to double check if they are at all unsure). However, their worry was that if they had to declare income tax for being a 'trader', the benefits people would somehow get hold of this information and use it to say that they are well enough to work, and therefor not entitled to their benefits, or at least not entitled to the levels they are currently getting (I know one gets DLA & Severe Disability Allowance but I am not sure exactly what the other gets), even though they are literally doing this from their beds. Obviously if there is a risk of that happening, it doesn't make financial sense to risk it, even though it gives them something 'positive' to do.

windswept

If you do not register as self employed within 3 months of starting to trade, there is a penalty of £100.
as soolin says, there may be very little tax to actually pay as you are just looking at turnover, but if you have no records of expenses you may come unstuck, ebay and paypal fees will be easy to prove, but what about postage/packing, cost of sales etc?
I am sure that many, many people are in a similar situation but blissfully unaware, my advice to you is to see a tax adviser sooner rather than later.
unless we are talking thousands in net profits, you have nothing to worry about.
a worst case scenario is that they will calculate tax on your recent earnings, if they are high, you could face a very large tax (and n.i. ) bill as they can go back 6 years ( I think).

arushofblood

I really appreaciate all you valuable advice, thanks everyone. I need to pop out for a bit but will be back later to read up fully on what I need to do. I fear the days of an easy Ebay working life are over !