Inland Revenue cracking down on traders on eBay

Golden_Calculator

Golfing, fishing and twitching are hobbies.

If you are buying and selling things on ebay with a view to generating a profit you are trading.

If your trading results in you making a loss year on year then the taxman will have questions about your business. He may then disallow any loss claims that you make on the basis that your business is a hobby.

So to sum up....

You gain - taxman wins
You lose - taxman also wins (although with good advice this can be avoided!)

I'll PM you shortly..

Sugar_Coated_Owl

Golden Calculator You mentioned that you're a tax consultant, is this the same as an accountant? If not, what is the difference? Just curious that's all

scoobydoo2_2

razorbladekisses wrote:

Golden Calculator You mentioned that you're a tax consultant, is this the same as an accountant? If not, what is the difference? Just curious that's all

One is sad, the other is sadder :rotfl: :rotfl: :rotfl:

just kidding

martindow

I think the hobby arises with 'businesses' which continually make a loss to be set against other income. In this situation the revenue can judge that your business is a hobby unless you get it to make a profit quickly.

Golden_Calculator

razorbladekisses wrote:

Golden Calculator You mentioned that you're a tax consultant, is this the same as an accountant? If not, what is the difference? Just curious that's all

Hard to beat Scoobydoos answer really!!

The short answer is yes.

For your info...During the training to become a Chartered Accountant, students work in a number of different areas such as tax, corporate finance, insolvency, audit, etc. When you qualify you have a choice as to which area you would like to focus on. If that is tax you can then take yet more exams to become a Chartered Tax Adviser. This sounds a bit pompous so you usually say you are a tax consultant if anyone asks!

scoobydoo2_2

if do register, how much work is involved in doing a tax return, would i need an accountant, sorry Golden Calc, a tax consultant to do it for me. I've heard they are pretty complicated?

Golden_Calculator

On first glance a tax return can appear quite daunting. I'm a bit biased but I'd suggest that for the time, hassle and cost involved I would get an accountant to deal with this for you.

My personal experience shows that for an ebay trader who:

1) is under the VAT limit
2) has minor levels of other income (bank interest, dividends, employment income)
3) completes a spreadsheet similar to that which I have detailed above to a good level

a charge of £150 + VAT for accounts, tax return and first year set up is a reasonable guide. If you pay tax and NI then real cost to you is only £123. An accountant would be negotiable on the payment terms and monthly standing order payments could be agreed.

There will be a lot of accountants out there turning their noses up at the fees I have quoted above, however, as I say these are a guide based on my experience and subject to conditions about the data provided.

If anyone out there thinks that all accountants are stuffy old men and the thought of going into their office to discuss your latest ebay sales terrifies you dont worry. I wouldn't suggest walking into the likes of PWC or KPMG and asking for an hour of a partners time however finding a suitable person should be easy enough and they will welcome a free consultation with you.

Sugar_Coated_Owl

I'm debating about whether or not to get an accountant. I suppose it makes more sense to get one and it would hopefully make my life a lot easier.

scoobydoo2_2

razorbladekisses wrote:

I'm debating about whether or not to get an accountant. I suppose it makes more sense to get one and it would hopefully make my life a lot easier.

Do you think we'll get bulk discount off Golden Calc!

Sugar_Coated_Owl

:rotfl: we could try our luck...