My little ebay business & tax

Kayalana99

Hiya guys,

*Would* like to avoid using a book keeper but I'm scared of getting this wrong and owing money I don't have as I've reinvested it etc.

I was told originally that all I needed was to keep a record of sales - purchases = profit

I figured I paid tax on profit & this was the figure I used.

Recently found out that I need to take off stock from my purchases...so currently sales - purchases+£stock = tax figure.

Just been looking at HM rev about capital allowances...so my question is as long as I am not spending over £25,000 on the machines I have brought, laptops, office furniture...I can take 100% off this for tax purposes ? http://www.hmrc.gov.uk/capital-allowances/plant.htm#1

Also when they say 'stock' is that just stuff to resell? I.e I buy postage stamps in bulk would I need to include these?

Is their anything else I am missing?

All advice appreciated!


(Is it just me or do they over complicate things!? )

Oh and if anyone could explain...I asked my family accountant's wife if he did book keeping and she said no he only does accounts... what does that mean?

Goodwinners

i have a lot of old stuff to sell on ebay such as football programmes books and just the odd bits but i dont get many views on my items can you help am i doing anything wrong so to speak thanks

Kayalana99

Goodwinners wrote: »

i have a lot of old stuff to sell on ebay such as football programmes books and just the odd bits but i dont get many views on my items can you help am i doing anything wrong so to speak thanks

Aha .. Theirs not really much I can help with that without doing the research for you.. Just check that your prices match up with the competition and you have good key wording/ accurate listing descriptions, fair postage prices ...etc.

patanne

A very basic answer (I'm sure someone will be along soon to give you a much better one) is

Stock at beginning of period + sales - stock at end of period -cost of sales = profit

Some accountants employ bookkeepers to do their clients books. If you are employing an accountant to do your bookkeeping then that is going to cost you a lot more than it needs.

The problem with HMRC info is that it has to cover the person who is making £100 a year & the person who is making £1,000,000 a year so for the one making £100 a year it is far too much information.

I did say very basic

lincroft1710

Goodwinners wrote: »

i have a lot of old stuff to sell on ebay such as football programmes books and just the odd bits but i dont get many views on my items can you help am i doing anything wrong so to speak thanks

Please don't be offended by this, but are you selling items that people actually want to buy. Check the completed listings, you'll see how much stuff doesn't sell.

00ec25

in brutal terms a bookkeeper maintains lists of transactions - ie what you bought and sold whereas an accountant uses that info to prepare the formal accounts which show the profit you actually made (which will not be the same as the balance in the bank account) and crucially what your tax will be. Accountants regard bookkeeping as a mundane task but if undertaken by them will charge their normal "skilled" rate rather than a bookkeeper's lower "mundane" rate

as stated by patanne you have misunderstood "stock", your gross profit is sales - cost of sales. From your gross profit you can also deduct other costs such as administration charges (eg an accountant's fee!)

the cost of sales is the formula: opening stock (what you have at the start of your financial year) + purchases (what you bought in year) - closing stock (what you had left on the last day of your financial year. Note your stock is valued at purchase price NOT at selling price


as for buying stamps these would be included in your purchases figure. Strictly speaking you should show their total cost separately from the items costs and report them as shipping costs since I assume you also buy packing materials so would include that as one figure. Accountants (and HMRC) regard stamps as being a "trivial" item so would not expect you to account for opening and closing stocks. In accountancy speak you "expense" the full purchase cost in the year you bought them so do not carry over unused items to the next year

00ec25

Goodwinners wrote: »

i have a lot of old stuff to sell on ebay such as football programmes books and just the odd bits but i dont get many views on my items can you help am i doing anything wrong so to speak thanks

there is a specific board devoted entirely to ebay selling where if you repost your question there you will get a much wider response rate
http://forums.moneysavingexpert.com/forumdisplay.php?f=40

Pennywise

If you are a sole trader and your business is small, you can adopt the new simplified cash basis for your tax return disclosures which mean that you simply declare monies in and monies out and don't need to adjust for stocks nor monies owed/owing.

Kayalana99

Kayalana99 wrote: »

Just been looking at HM rev about capital allowances...so my question is as long as I am not spending over £25,000 on the machines I have brought, laptops, office furniture...I can take 100% off this for tax purposes ? http://www.hmrc.gov.uk/capital-allowances/plant.htm#1

Is their anything else I am missing?

Tar guys if anyone could just confirm this bit up as well?

zygurat789

Kayalana99 wrote: »

Tar guys if anyone could just confirm this bit up as well?

Yes, so long as it is all only used for business purposes. Any private use you should apportion on a % basis.