Making a little extra with ebay

webbhost

Hi,

Not sure if this is in the right category or not, but as a forum I think it might be an ideal place to discuss.. hope you dont mind MSE, if in wrong category feel free to move it..

Anyway,

I am a big lover of ebay and I recently stumbled across a product that I can purchase abroad, and sell here in the UK for more, at a profit (profit of 60p per pack to be precise)... I have trialled this with a few packs and want to go into it full on, but I have a few problems facing me..

I already work full time, therefore I'm not allowed any extra income which is untaxed, but I have absolutely no idea what the rules are for selling at a profit etc..

Do I have to register myself as a business?
How do I declare tax on anything I earn as extra on the side?
and so on..

I have looked high and low on the internet for it and I can't seem to find an answer that is "simple". The goverments site is that hard to navigate to what you actually want to find that you never find it!.

So is anyone familiar with any of this?
Thanks all.

mummybearx

Not sure about the legal side of it, but I have sold a few hundred pounds worth of stuff on ebay over the last few months and have not declared anything to the taxman.

However, I'm not sure about buying things to sell. I personally would still not declare this, but I'm sure someone with more wisdom than me will come along and say that this is in fact illegal. Back of my mind says that buying to sell on at a profit should be declared x

hermum

As soon as you buy to sell you are self-employed. You'll need to register as a business seller on ebay.
http://www.hmrc.gov.uk/sa/register.htm lots of info here.
Have you taken into account the import charges.

mocannhoff

If you start selling items for a profit that you buy new HMRC would like to know, in other words you will have to inform HMRC that you start trading. You don't need to worry about making a few pounds a months, but if you trade a lot on HMRC and are not registered they might want to inspect you. If you are earning hundreds of pounds each months you should definitely register.

Cazza

You need to register as self-employed with HMRC here ...http://www.hmrc.gov.uk/selfemployed/register-selfemp.htm

You don't have to set up a "business" such as a ltd company, you can just tell HMRC you have an additional income from your self employed work.

Keep records of everything you spend to do with the business - the stock you buy, postage and packaging costs to send out the items, fees you pay to ebay. You also need to keep records of everything you sell and for how much.

After the end of the tax year, HMRC will ask you to complete a tax return, you can do this yourself or you can ask someone (an accountant or book-keeper) to do it for you. When you fill out the tax return, there will be space for you to enter your employed income, your self employed income and how much tax you have paid already via PAYE. If you complete the online form, it will then tell you how much extra tax you have to pay and how to pay it.

Provided your record keeping during the year is good and you give yourself plenty of time to fill out the form online, it's really not that difficult.

Good luck!

webbhost

Thanks for the input people, appreciated.

2 questions arising from this:

1) if customs do not charge me for the goods coming inwards, would this then be picked up with HMRC? The product purchased is worth £17 and are therefore not given charges at the point they enter. However, if I suddenly had to start paying customs charges via self tax assessment, it would pretty much take the profit away..

2) Would I be right in saying that because I am already employed full time by a registered company, and already pay national insurance contributions, I do not need to pay any "extra" NA contributes?
A little confusing on the HM site cause it says "As well as registering for Self Assessment you’ll need to arrange to pay Class 2 National Insurance contributions straight away".

3) Would I be required to send off any receipts etc, or is there anywhere I can see an example self assessment return?

Thanks.

webbhost

also not it would not be alot of profit, probably about 20 quid a month profit a month, however this is only 1 item.. I'm going to be on the look-out to expand, so I'd rather just do everything by the book now and be safe like.

webbhost

4) What happens if I register for self-assessment and a month down the line I decide it's not working and pack it in?.. do I just un-register or something?

Cazza

1. Not sure of the answer to this one at all - I'd call HMRC and ask them the question. It's a hypothetical question at the moment, so no long term negative impact if the answer isn't in your favour.
2. Yes, no need to pay the extra. There's a form you can fill out to opt out of this. If when you fill out the tax return it calculates you need to pay additional NICs, it will tell you.
3. You do not need to send receipts off, but HMRC can ask to see evidence of your calculations You need to keep all receipts and records for 6 years, in addition to he current year in case of this.
4. Yes, just tell them you're no longer self employed. BUT, the likelihood is that they will ask you to continue to complete a self assessment form for another 2-3 years afterwards, just because you're on the radar by then. If your finances are very straightforward, ie, you just have PAYE income at the lower tax rate, then the likelihood is they will stop asking after that.

And yes, much easier to start off doing things right now, than have it backfire on you at a later date. It's also much easier to remember to keep records and work out how to do these things when it's small scale, than when it's got much bigger! Good luck!

blue_haddock

I'd say if the item is worth £17 and you only make 60p per sale is it worth even bothering with?

webbhost

sorry blue, ill elaborate... its £17 for a pack of 10, and I make 60p per item, so in a pack of 10, I make £6. Not bad for packing a few envelopes and takin them 10 doors down the road.