Starting Ebay shop - Contacting 1st potential supplier - Legal/TAX? - Advice Pls

noz85

Hi there,

I've been toying with the idea of starting my own ebay shop for some time now. A shop selling musical instrument supplies and eventually (all going well) some instruments perhaps.

I've played with a few (a lot) of potential shop names. Got a few good ones I think.

The first supplier I am looking to approach is D'addario UK.
Here is a link to their online account application form if you might care to take a look?
http://www.daddario.co.uk/downloads.html?task=finish&cid=19&catid=10

From what I've read from around their site etc, it would appear that they're quite small biz friendly. Therefore I am hopeful that I would be able to get the ball rolling with them. Once I get one supplier and strike up a strong working relationship, I'm sure it will be easier to approach others.

A couple of questions.

1st - I'm not 100% sure how to fully complete the application form. As the shop would be basically ran from my house via ebay, the trading address would be my home address correct? Do I need to worry about registering the company at this stage when things are so small? I would apply as a Sole Trader. Would I need to be VAT registered at this stage? Would it help the application process if I was VAT registered? The finance manager would be myself. Unless it would be necessary to have an account take care of things? But for something of this scale (almost hobby size) I don't think that would be necessary really. The references section of the application is where I would fall short I'm afraid.

If I have any questions, am I really better off contacting D'addario UK to clarify before making my application?

2nd - If I was to contact them, am I better off picking my company name, getting the relevant ebay ID/shop name set up and a shop email address (hosting is it called?) before contacting the supplier? As I'm sure it would look more professional to contact them from [EMAIL="myname@shopname.com"]myname@shopname.com[/EMAIL] rather than contacting them from eg. [EMAIL="myname@ymail.com"]myname@ymail.com[/EMAIL] ... ?

I am employed full time and therefore pay my PAYE taxes. I know there are quite a few threads in this section about TAX, but I'm not sure how it would apply to me. As this would start out as a bit of a hobby, only turning over small amounts. £200-£300 profit a month AT BEST, would I need to worry about the TAX side of things? I think it's probably best that I contact the TAX office and find out the caps etc and when it would affect me.

Also, would it be beneficial to attached a sort of 'business plan' with any application?

Please give advice if you can. It will be very much appreciated. I'm hoping this doesn't just seem like a pipe dream, and I really would be delighted to get this going.

Many thanks.
John

property.advert

Setting up a virtual address with a virtual landline telephone number redirected to your mobile would cost a few hundred pounds a year at a minimum and a small ongoing cost. However, it does hide your home address - do you really want people google mapping your front door ?

A company with you doing your own accounts (truly not difficult if small turnover) can cost you less than £50 a year.

Websites are around £10 for two years. Google apps free for your info@yourname.com

VAT is tricky. You don't need to be registered until you turnover £70k ( you can register at any turnover amount) but if you don't register, you can't claim the VAT you pay on things you buy. However, if you do register, that which you sell will be 20% more expensive. You have to weigh up the options.

You would need to pay tax but how you do that depends upon how you structure it. Self employed would be income tax, a company would be corporation tax. I know little about self employed deductible expenses but there are legitimate expenses you could offset against the income a company earns.

I am comfortable with companies so I would choose that route. I'd probably not go VAT registered to be extra competitive if I could. I'd want a separate company address and I would get a telephone number. I'd also do my own accounts.

noz85

property.advert wrote: »

Setting up a virtual address with a virtual landline telephone number redirected to your mobile would cost a few hundred pounds a year at a minimum and a small ongoing cost. However, it does hide your home address - do you really want people google mapping your front door ?

A company with you doing your own accounts (truly not difficult if small turnover) can cost you less than £50 a year.

Websites are around £10 for two years. Google apps free for your [EMAIL="info@yourname.com"]info@yourname.com[/EMAIL]

VAT is tricky. You don't need to be registered until you turnover £70k ( you can register at any turnover amount) but if you don't register, you can't claim the VAT you pay on things you buy. However, if you do register, that which you sell will be 20% more expensive. You have to weigh up the options.

You would need to pay tax but how you do that depends upon how you structure it. Self employed would be income tax, a company would be corporation tax. I know little about self employed deductible expenses but there are legitimate expenses you could offset against the income a company earns.

I am comfortable with companies so I would choose that route. I'd probably not go VAT registered to be extra competitive if I could. I'd want a separate company address and I would get a telephone number. I'd also do my own accounts.

Thanks very much!

Address wise - I just did a quick google for PO box costs and found this. Just as an example http://cityaddress.co.uk/mailbox-services/virtual-mailing-address-v-pobox.html

Would something like that be suitable?

Contact number wise I would set up a seperate mobile phone number and phone for business only calls. Which I'm assuming would be cheap and cheerful. Giffgaff for one is nice and cheap. Just need a handset.

Websites - I have done some research on hosting and address availability and was pleasantly suprised at how affordable it appeared.

Copying your summary here, I am comfortable with companies so I would choose that route. I'd probably not go VAT registered to be extra competitive if I could. I'd want a separate company address and I would get a telephone number. I'd also do my own accounts... I would agree. I think this would be the way to go.

Any help on the approach to D'addario would be very much appreciated.

Thanks again.

steve1980

You'll also need to register with HMRC that you are self employed.

Premier_2

A registered (limited) company address cannot be a virtual address.

noz85

So do I have to be VAT registered from the get go? Or not? A bit of confusion here. If I don't have to be, I won't. It's only going to a pilot/hobby. If it takes off and takes over my life then I'll happily quit my job and take it on full time and then become VAT registered etc etc.

Premier_2

noz85 wrote: »

So do I have to be VAT registered from the get go? Or not? A bit of confusion here. If I don't have to be, I won't. It's only going to a pilot/hobby. If it takes off and takes over my life then I'll happily quit my job and take it on full time and then become VAT registered etc etc.

As it appears your annual tunover is (at least initially) going to come in well under the VAT registration threshold, then you are not obligated to register for VAT at this time

property.advert

Premier wrote: »

A registered (limited) company address cannot be a virtual address.

It cannot be a PO Box but it certainly can be a virtual office address.

property.advert

noz85 wrote: »

So do I have to be VAT registered from the get go? Or not? A bit of confusion here. If I don't have to be, I won't. It's only going to a pilot/hobby. If it takes off and takes over my life then I'll happily quit my job and take it on full time and then become VAT registered etc etc.

Forget VAT for now. Just remember that you are not able to reclaim VAT on the items you buy.

Years ago I was informed by HMRC that I could register for VAT to claim VAT back on a single purchase and then de register as my general turnover would be below the limit at the time. In the future it may be worth remembering if you start to achieve greater volumes.

noz85

So if (at this stage) I don't need to concern myself with VAT unless volumes increase considerably (by this I assume you means volume of sales? But were talking in regards to claiming VAT back..?(sorry)) then I just need to select my shop name and then work out how I'm going to approach the supplier.

Is it better to get myself a [EMAIL="myname@shopname.com"]myname@shopname.com[/EMAIL]email address for professionalism?

I'm guessing I've only really got one shot at it. So I need to get it right first time. Any body got any advice for this part of things? As I said in my OP, I'm not completely sure about how to complete the form - Obviously we've cleared up the 'VAT registered or not' side of things. I also need to get my seperate contact number, and seperate mailing address rather than my home address. Probably best that the supplier mails to the new mailing address aswell otherwise I'll be likely to have dozens of missed delivery notes through the letter box. That sounds sensible? Do I need to worry about the 'References' section of the application form?

Would it be wise/worth contacting the supplier via email before attempting to send a completed application form.

Thanks again for your advice one and all.
Really appreciated.

property.advert

Folk don't trust people who don't have a landline number. A remnant from the past certainly but still true today. I have VOIP numbers which cost me £25 a year. Picking your area with 01489 xxx xxx for example will cost under £50 and you redirect it to your mobile. Do consider however whether you can take business calls when you are in your regular job. If not, you need another solution.

I use GoDaddy for websites. 2 years of .co.uk and .com for the same basic name costs around £20. Google around for 30% GoDaddy codes and then go through https://www.topcashback.co.uk to generate a further rebate.

I would set up a company. It is clean, doesn't interfere with your work and as long as you are half way organised, a doddle to cope with the administration. Loads of help online and http://www.taxationweb.co.uk/ is a good back up resource.

As for the approach to D'addario, simply email and explain that you are a new start up company but that you are XYZ years experienced etc. and so on and so forth. You'll be paying up front so they have no risk.