Going self employed using car boot stock how do I demonstrate to hmrc what I paid

uttermadness

After 2 months dipping my feet into the water trading on Amazon and ebay following my redundancy with some success I have decided to take the plunge and register as self employed. Before I do can anyone advise me on the following.


I buy most of my stuff from car boot sales, and consequently have few receipts to show what I paid for my items. Will hmrc take me at my word.
Can I claim costs against my profits such as the cost of petrol, entrance fees, mobile phone and broadband.
As a sole trader will I be liable to any extra business rates or expenses of any kind. I would anticipate my profits in the first year will be less than £6000 so I should be able to get an NI exemption.
Any advice would be greatly appreciated, many thanks in advance.

TBagpuss

In terms of proof, while you may not get receipts you can ensure that you keep good records - make a note of what you buy, what you pay, and ensure that your books are maintained as you go along.

You can normally offset expenses against turnover to work out your net profit - obviously you can only claim the business element of the car expenses etc. Check your car insurance as you may need to change your cover if you are using the vehicle in connection with a business - most standard policies will only cover the commute to and from work.

I can't comment about business rates - I suggest you look on our local council's website for information in the first instance.

antrobus

uttermadness wrote: »

....I buy most of my stuff from car boot sales, and consequently have few receipts to show what I paid for my items. Will hmrc take me at my word....

Basically, the answer to that question is 'yes'.

uttermadness wrote: »

...Can I claim costs against my profits such as the cost of petrol, entrance fees, mobile phone and broadband....

Better to claim mileage (45p a mile) for your business mileage, entrance fees most certainly, mobile phone and broadband certainly a proportion of those expenses.

uttermadness wrote: »

....As a sole trader will I be liable to any extra business rates or expenses of any kind. I would anticipate my profits in the first year will be less than £6000 so I should be able to get an NI exemption.
Any advice would be greatly appreciated, many thanks in advance.

Extra business rates? I wouldn't have thought so. Running an eBay type business from home doesn't normally raise any issues, unless you're anticipating having the scale of business that involves HGVs reversing into your driveway.

uttermadness

Many thanks for the advice. I've posted this question on the tax credits board but thought it might be worth asking here as well. As I will be self employed working over 30 hours a week for what at first will probably be under £6000 a year profit (my last years earnings wete 12,000 from my former job) would I be entitled to claim working tax credit.


Many thanks

Aquamania

uttermadness wrote: »

After 2 months dipping my feet into the water trading on Amazon and ebay following my redundancy with some success I have decided to take the plunge and register as self employed. Before I do can anyone advise me on the following.


I buy most of my stuff from car boot sales, and consequently have few receipts to show what I paid for my items. Will hmrc take me at my word.
Can I claim costs against my profits such as the cost of petrol, entrance fees, mobile phone and broadband.
As a sole trader will I be liable to any extra business rates or expenses of any kind. I would anticipate my profits in the first year will be less than £6000 so I should be able to get an NI exemption.
Any advice would be greatly appreciated, many thanks in advance.

If your profit is less than £6k (and you have no other form of income) you won't be paying any tax anyway, so don't worry too much about relief opportunities (such as cost of petrol, entrance fees, mobile phone and broadband) at this stage

Aquamania

uttermadness wrote: »

Many thanks for the advice. I've posted this question on the tax credits board but thought it might be worth asking here as well. As I will be self employed working over 30 hours a week for what at first will probably be under £6000 a year profit (my last years earnings wete 12,000 from my former job) would I be entitled to claim working tax credit.


Many thanks

http://www.hmrc.gov.uk/tools/taxcredits_qualify/

dktreesea

Yes, on a profit of £6k you should be able to claim working tax credit.

For items you buy for cash, just keep a cash book and a note as you go around the car boot sales, and then write it up in a cash book at the end of the day.

Don't forget to do things like getting a receipt for any parking fees or entrance fees. These are both claimable.

If you are buying bar coded items, for goodness sake get a smart phone so you can check the price on Amazon or Ebay before you buy the item. Don't guess.Guessing is an expensive way to run this kind of business. This applies just as much to buying at a car boot as it does buying from an online wholesaler.

paddyrg

BTW insuring vehicle for business use is usually very cheap, a few quid a month. Worth it as without, if you have a prang at a car boot, the insurer might not pay out.