Goods from wholesale on e-bay

bluebell13

Hi. I have built myself a feedback of over 100 positive on e-bay by buying and selling my own items. Today, I have bitten the bullet and ordered a few items (about 15) from a wholesaler with the aim of selling them at a profit on e-bay. At what point would I have to declare this income for tax purposes?
I don't intend to do this on a grand scale, but just for a bit of extra holiday spending money.

Any help or advice appreciated. Thanks.

clareyp

Hi, unfortunately everything you sell from the wholesaler would have to be declared if you are already a taxpayer..
If not you would have to earn up to your personal tax free limit before declaring.
I currently work full time & started a business on ebay 5 yrs ago which at busy times almost matches my day job so if you have any questions feel free to ask!

tru

You have 3 months from when you start your biz to register with your tax office. It doesn't matter whether you make a profit or loss, or whether or not you have another job, they will still [strike]shoot you[/strike] fine you £100 if you don't inform them

As you've made your first business purchase today, give them a ring and give today's date as your start date.

bluebell13

What do I have to tell them? Does this mean I will have to make detailed records for every item? The whole idea is pretty scary as I am just dipping my toe in the water at the moment ! I dont even know whether I have chosen the right items to sell. Will I have to pay tax on the whole item or just the profit? Sorry for all the questions but I am very green!

MarkyMarkD

You pay tax on your profit. Your profit is your sales income, less the cost of buying the items, less all of your other costs - ebay fees, paypal fees, postage, packaging, travel to/from the post office, everything!

tru

I keep probably-too-much-detailed records because I'm obsessed with spreadsheets

Give them a ring and tell them you'd like to register as self-employed, they'll ask you what you'll be doing/selling and what date you started. They'll send you an info pack which is really useful, also they offer a short course on book-keeping (I think it's about 5 hours). I don't know exactly what they teach you cos I didn't bother with it lol.

You only pay tax on your profit, and don't forget you have your personal allowance - £5225 I think? Don't forget, you'll have ebay fees, paypal fees, stamps, packing materials etc, all these are expenses along with whatever you pay your supplier.

I print off a monthly statement from paypal and my ebay fees invoice so it's easy to keep track of everything.

You'll have to fill in a tax return, you won't get one for a year if you're starting now, it'll ask for info from april 2007 - april 2008.

martindow

You may well be quite startled when you keep records of all of your expenses and include packaging ,travel to the post offfice (40p/mile) and all the other extra bits and pieces, to find how little profit there actually is!

soolin

I agree with Martindow, that sinking feeling when you work out you are working for approx 75p an hour, on a good week :eek:

bluebell13

To be honest I wasnt expecting much profit. Thats why I wasnt sure whether I would need to inform the tax office. Taking time into account it probably wont be worth it but with 2 young children I was looking for something extra to do from home. I do enjoy selling on e-bay so it is a bit of a hobby too! As I work part-time I will use up all my tax allowance with my job.

Thanks for all your help folks.

COOLTRIKERCHICK

i have just turned my hobby of selling on ebay into a business.......

as in reality... i am now buying with the intention of selling on......

i contacted the local business eye/connect.... which is a business started... which helps new businesses.. start up... with usefull contact info.. help... with tax etc....

as we have had a business before.. we knew most of the basic.... stuff......but they are now helping me with advertising..etc.....

the way i looked at my 'hobby' was that in reality... my feedback was getting higher....etc.... and the taxman does keep and eye on ebay...... and know in my luck.... it would be me that they would like to question...lol....

you might find after everything.. you may not pay tax.... or if you do it might be very little......

but as everyone has said in reality.. you should contact the tax man.. to inform them......but as the business advisor.. told me..... my passed buying and selling. could be classed as 'fact finding'

what ever you decide to do.... i would keep a record of how much you spend.. and how much money in get in... with these wholesale items.....not only for potential tax purposes.. but for you...to see if it is worth buying these items again to sell.....

and ye know exactly where you are coming from with ebay...... totally addicted.....and amazon......

good luck....

martindow

bluebell13 wrote: »

To be honest I wasnt expecting much profit. Thats why I wasnt sure whether I would need to inform the tax office. Taking time into account it probably wont be worth it but with 2 young children I was looking for something extra to do from home. I do enjoy selling on e-bay so it is a bit of a hobby too! As I work part-time I will use up all my tax allowance with my job.

Thanks for all your help folks.

The book keeping is not that much work I find as long as you note it all down as you go. It's a complete nightmare if you have to start from a carrier bag full of receipts and invoices. I've been there, but once only - reformed character now