starting an ebay business - buy + sell from carboots

wubbzy

hi, everyone i have read several threads on this forum over and over trying to get all the info to sink in (think im getting there slowly), thx to everyone.
next week i intend to register as self employed and start trading on ebay, i will be buying items from car boots, out of the local paper and from ebay, i intend to get round to seeing an accountant, but to help myself and others who may be reading this due to the new tax year being about to start etc, could anyone answers a few questions,

1. when buying items from a car boot and out of the paper is written down records of costs enough (as receipts obviously arent an option)

2. can anyone recommend a spreadsheet relevant to selling carboot itemson eaby (struggling a little with the best options for heading )

3. i think i can claim 40p a mile expences but do i have to have business insurance to claim this expence or can i still claim it with my car being insured normally.

windswept

I know someone who is a very succesful power seller who does just that, he makes far more money than me. jumble sales and charity shops are his faves.
I would get a receipt book and either fill it in yourself for purchases or get the seller to sign it.
spreadsheets are anathema to me, I use a good old fashioned accounting book for small businesses.
get another notebook for mileage amounts, having just worked out the mileage for only 6 months, ours was 500 which equates to £198- so well worth claiming.
we dont have the car on business insurance.
I think that you only need that if you are claiming a capital allowance if you have bought a van etc.
my best advice is to keep meticulous records, I have and found doing the yearly accounts on Sunday very simple, my best trick was to keep a running total of the cost of sales, you can just do the opening and closing stock calculation but it was handy being able to double check the figures.
you will probably need some kind of spreadsheet for stock purposes, I have my suppliers invoices to go on.
I keep all my sales invoice copies stapled together on a monthly basis but I'm hoping to be able to just print out a monthly sales history now I have subscribed to sales reports in ebay, for all my other sales I have a duplicate receipt book or customer invoice copies. (total sales are entered into my accounts book on a daily basis).
you will also need a folder for keeping any other expense receipts in , such as packaging, postage, ink , paper, etc. you will find many "expenses" just as I did.:rotfl:
It's confusing to begin with but once you get into the swing of it, you really don't need an accountant, especially if your turnover is going to be less than £15k.

wubbzy

hi, thx for your advice, it will make a big difference to me regarding the type of car insurance i need as i am only a named driver because i only recently passed my test. petrol will be a regular expence due to several carboots each week and travel to look at items in papers etc.
i expect my turnover will be more than 15k simply because postage will make a big difference to the turnover, does this make a differnce.
also i was worried about whether there would be a problem with me just having written records of sales, as you cant really ask for recipets or even a quick signature at carboots, both because you are in a rush to get round asap and two pepole generally dont like to think they are selling to dealers,
thx again for the advice

windswept

if your turnover is more than £15k, you have to fill in a full self assesment form with a lot more detail than is required for less than this amount-all you have to fill in for this a is 3 line calculation: turnover minus expenses = profit (or loss).
as long as you keep good records of your purchases that is all the tax man requires, a written account of the price paid in a receipt book is perfectly adequate.

rare_stuff

wubbzy wrote: »

3. i think i can claim 40p a mile expences but do i have to have business insurance to claim this expence or can i still claim it with my car being insured normally.

I replied to this in more detail on the tax thread, but I believe the 40p a mile is only for employees, self employed will have to record all mileage, and then work out the percentage of it which is business, then apply this percentage to the total motoring costs.

As for insurance, I don't think this is the tax mans business, it would just be an issue if you had to make a claim, or someone claimed against you while using the vehicle for uninsured purposes. Then you could be expecting legal action!

here's the link to the more in depth answer I gave on the tax thread - http://forums.moneysavingexpert.com/showpost.html?p=4776369&postcount=84

wubbzy

windswept wrote: »

if your turnover is more than £15k, you have to fill in a full self assesment form with a lot more detail than is required for less than this amount-all you have to fill in for this a is 3 line calculation: turnover minus expenses = profit (or loss).
as long as you keep good records of your purchases that is all the tax man requires, a written account of the price paid in a receipt book is perfectly adequate.

thankyou i didnt relise that, would you recommend an accountant if the turnover is over 15k, i would estimate i could be under this but could also be a little over this amount

wubbzy

rare_stuff wrote: »

I replied to this in more detail on the tax thread, but I believe the 40p a mile is only for employees, self employed will have to record all mileage, and then work out the percentage of it which is business, then apply this percentage to the total motoring costs.

As for insurance, I don't think this is the tax mans business, it would just be an issue if you had to make a claim, or someone claimed against you while using the vehicle for uninsured purposes. Then you could be expecting legal action!

here's the link to the more in depth answer I gave on the tax thread - http://forums.moneysavingexpert.com/showpost.html?p=4776369&postcount=84

thx i didnt relise this, i have read that much you can get the wrong end of the stick, i presumed i could class my mileage as an expence, as i will use quite a bit of petrol which will theretically be an expence.
as for the insurance in my opinion which is possibly wrong i will only be using my car to drive to someones house to buy something they are selling in the paper or going to a carboot if for example i was involved in an accident on one of these trips, i dont see how there could be any legal action,if i am completely wrong and anyone can explain that would be great, thx again

rare_stuff

wubbzy wrote: »

thankyou i didnt relise that, would you recommend an accountant if the turnover is over 15k, i would estimate i could be under this but could also be a little over this amount

If you're planning to make a living from this you better hope for a turnover greater than that or be selling stuff that came free, with no outgoing costs. Turnover is very different to profit -

Bought £12,000 of widgets,
sold for £15,000,
expenses, £1,000

=
Profit £2,000,
turnover £15,000

rare_stuff

wubbzy wrote: »

thx i didnt relise this, i have read that much you can get the wrong end of the stick, i presumed i could class my mileage as an expence, as i will use quite a bit of petrol which will theretically be an expence.
as for the insurance in my opinion which is possibly wrong i will only be using my car to drive to someones house to buy something they are selling in the paper or going to a carboot if for example i was involved in an accident on one of these trips, i dont see how there could be any legal action,if i am completely wrong and anyone can explain that would be great, thx again

Well...

...You could be involved in a collision and your insurance company would want to know the purpose of your journey, by telling a lie, you could get into even more trouble.

...Insurance companies ask for details of your employment. telling them an untruth on this could be seen as an attempt to defraud

...Imagine that whilst parking your car outside the sellers house you cause an accident, the seller fills in a witness report stating that you were buying something off them, which your insurance company would know wasn't for your personal use.

Slim chances all, but you asked, and my advise would be to get the insurance, as you can always claim on it and not have to worry about not being covered. You can also claim it as a business expense.

windswept

you do claim mileage as an expense, just keep a record of all business mileage, it's got nothing to do with being an employee, I have the guidance notes in front of me, it's definitely 40p per mile up to 10k miles.
we sell at events and toy fairs etc. so the mileage adds up.
I dont include trips to the P.O. as I usually post on my way to work ( I am employed as well as self employed in partnership).
you are correct on the insurance front, how on earth would anyone know you were in business if you had an accident? Insurers dont normally ask you what you were doing when you had an accident, I know because I crashed my car last September.:o
I would download the relevant forms from the hmrc website to get a feel for all you need to do, also you will be invited to do a free tax workshop-they are well worth a few hours, just don't get a parking ticket like I did! they are NOT tax deductable.:p
Dont forget that if your earnings are likely to be over £5k you will have to pay class 2 NI, at £2.20 a week.

wubbzy

rare_stuff wrote: »

If you're planning to make a living from this you better hope for a turnover greater than that or be selling stuff that came free, with no outgoing costs. Turnover is very different to profit -

Bought £12,000 of widgets,
sold for £15,000,
expenses, £1,000

=
Profit £2,000,
turnover £15,000

i only estimate my profit to be around the 5000 - 7000k mark depending on effort, i cannot estimate my turnover as accuratly as this as it will depend on what i sell and postage costs, if i was pushed to estimate i would estimate to be around the 15k mark but it is a rough estimate.
this isnt what i will be living off, i will be living off oh wages etc and this is simply to better our lives as we are on a low income.