Do I need to register to HMRC as a business, or pay tax?

soolin

belfast88 wrote: »

Any idea what happened to her? A fine? Criminal record?

When I last heard it was all getting rather unpleasant as DWP caught her before HMRC. She was claiming benefits that would have been affected by income, so they were automatically withdrawn pending a discussion under caution.

I know she was warned that the ultimate penalty for benefit fraud is a short prison sentence, but that it was unlikely to be that harsh, but that she would be expected to repay all overpaid benefits. DWP also involved HMRC but I lost touch before they did anything.

I remember though that her two main concerns were that a) people would think she was a criminal, and b) they would have to stop their family holidays abroad if they were expected to pay it all back.

Flyonthewall

2013yearofthehouse wrote: »

Exactly, it's the patterns that would make it obvious - quite interesting really, studying patterns to try and spot the scenario. By saying hundreds, I meant hundreds a year and was exaggerating an example of more than a few a year, which probably wasn't clear in my post. Also, I was thinking more of items from auction houses or car boots, that you can't take back. I'm not sure if my posts are coming accross as argumentative, I don't mean them to, I'm just pondering "out loud", and am in agrement with you anyway!

It had just got me thinking about a time I sold some brand new ink cartridges. My printer broke and the new one I got took different cartridges. Obviously I bought the ink with the intention to use myself and if I'd been selling 1 or 2 cartridges it would appear that way, but I sold quite as few, as they had been on special offer so I'd stocked up. Of course to an outsider it could look as though I'd bought them to sell and in theory I could have, but since it was a one off there was no repeat pattern.

Anyway, clearly I'm having a boring Sunday and should be doing something more productive than pondering such trivial things!

lol.

There would mostly likely be some sort of trail leading back to an auction house. So if you were always buying it would look odd. A carboot is cash in hand so harder to prove either way, although selling a bulk load of stuff even over time with no proof of where you got any of it is probably going to look far worse lol.

A one off with one item would be a pretty bad business lol.

I could easily look like I have a business. Got loads of games I could sell. Would take a while to sell them all especially as I'm always buying more . Can't prove where I got them all from but I do still have enough receipts and save files to prove I bought random games over time and played them all lol.

I think with certain items it's clearer who are the businesses though. Like with games, business sellers sell in bulk and always have a few games at least for sale. Collectors selling collections often sell in bundles (often one big bundle) or never at all. Other gamers sell a handful at once every so often or one at a time of fairly new releases they've finished with, or in one or two bundles for the release of a new console when they're updating everything and have a small collection of games to sell.

Rare to see a gamer/collector selling games constantly.

Flyonthewall

belfast88 wrote: »

Any idea what happened to her? A fine? Criminal record?

fairydiamond wrote: »

With you asking these questions, to me it makes it look like you are weighing up the risks of not declaring your business to HMRC.

I agree with fairydiamond. If so, it's not worth the risk - just do the right thing and declare it.

the_tired_one

I only ever buy on ebay. Who is going to check millions & millions of accounts to see who is & isnt a business?

The OP says he makes about £20 a week at most. I would say 'so what of he does'.

Ive only ever imagined ebay to be a ruthless machine just out to make money!

bigheadxx

If your turnover is less than £77000 you fill in short version http://www.hmrc.gov.uk/forms/sa103s.pdf and you also only need to enter total expenses, not a full breakdown.

RFW

the_tired_one wrote: »

I only ever buy on ebay. Who is going to check millions & millions of accounts to see who is & isnt a business?

Automated HMRC software. Perhaps the OP could "get away with it" but given there wouldn't be tax to pay anyway it's hardly worth it.

I have received a letter from HMRC asking me to confirm where/how my business was registered (it was, Ebay just had a different address), so they do do it.

From the little info I had, I'm inclined to think that high volume sellers still listed as 'personal' will get flagged to Ebay. It's in Ebay's interest to keep HMRC sweet so I'd bet they have a quota of sellers they shop each month/quarter.

soolin

the_tired_one wrote: »

I only ever buy on ebay. Who is going to check millions & millions of accounts to see who is & isnt a business?

The OP says he makes about £20 a week at most. I would say 'so what of he does'.

Ive only ever imagined ebay to be a ruthless machine just out to make money!

Nearly all I am aware of have been turned in by friends or relatives. That chat in the pub about for instance supplying computer parts might just get up someones nose and a quick anonymous call to HMRC is all it takes.

I am aware of numerous people having been contacted by either DWP or HMRC with general questions asking whether they might want to reconsider their 'returned' income.

RFW

soolin wrote: »

Nearly all I am aware of have been turned in by friends or relatives.

The one I received was definitely via Ebay as it contained details that only Ebay had for the business name, which is why there was no record at HMRC. It's quite a few years ago and as far as I know they've got more searches in progress and ways of filtering out any possibles.

Prothet_of_Doom

houseimprover wrote: »

Bet you wished you hadn't asked now lol

The problem is that little step from 'ducking and diving' to fully legitimate, is a nightmare of red tape and learning.

It's also a really good introduction to the world of business.

martindow

bigheadxx wrote: »

If your turnover is less than £77000 you fill in short version http://www.hmrc.gov.uk/forms/sa103s.pdf and you also only need to enter total expenses, not a full breakdown.

True but you need to have paperwork to justify where these figures came from. Although the return has been simplified the detailed record keeping relating to the business is unchanged.