Ebay self-employed advice

distant_smile

Hello,

I am looking to set up a business (part of which will involve Ebay) and will be registering self-employed. But I have a few issues that seem to have very vague explanations online and so was hoping someone may be able to shed some light on.

1. If I buy stock of 10 items and the postage to me is £10. When I sell one of the items how do I factor the postage as an expense? Is it simply dividing the postage by 1o (£10/10 = £1 expense per item) or is there another way to do it?

2. How do I manage when selling new stock bought for profit (that is taxable) with old items around the house (that are not taxable). Obviously all transactions will show on my Paypal statement, and if I omit any would Inland Revenue not query it?

3. How is the best way to calculate electricity expenses? For example 3 hours a night on a PC uploading to ebay as I have been told this is also tax deductable?

Any help would be appreciated as I am very new to all of this

Regards,

S.B

Grimbal

distant_smile wrote: »

Hello,

I am looking to set up a business (part of which will involve Ebay) and will be registering self-employed. But I have a few issues that seem to have very vague explanations online and so was hoping someone may be able to shed some light on.

1. If I buy stock of 10 items and the postage to me is £10. When I sell one of the items how do I factor the postage as an expense? Is it simply dividing the postage by 1o (£10/10 = £1 expense per item) or is there another way to do it?

2. How do I manage when selling new stock bought for profit (that is taxable) with old items around the house (that are not taxable). Obviously all transactions will show on my Paypal statement, and if I omit any would Inland Revenue not query it?

3. How is the best way to calculate electricity expenses? For example 3 hours a night on a PC uploading to ebay as I have been told this is also tax deductable?

Any help would be appreciated as I am very new to all of this

Regards,

S.B

I'm no expert, but:
1.thats how I do it. I calculate all costs involved in getting an item to my door to work out unit cost price. I assume this is what you meant as opposed to keeping track of orders for (say) hmrc returns?


2. I have two accounts, one business and one personal, both for PayPal and ebay


3. I wasn't aware of this, so can't comment. To be honest though, it sounds tricky, would you have to show exclusive use of the pc for that time by your ebay business?


If you're keeping stock at home, remember to let your contents insurer know

ballisticbrian

Not in any particular order; You need a business bank account, and that will be your PayPal account initially. Don't put other stuff through it. Consider that anything sold through that account you'll be taxed on and that is where you will pull the records for your accountant.


You don't need to factor the postage / profit / loss / tax on each transaction. You just spend 10 pound on postage and it goes in your expenses for that month. Simples.

RFW

distant_smile wrote: »

Hello,

I am looking to set up a business (part of which will involve Ebay) and will be registering self-employed. But I have a few issues that seem to have very vague explanations online and so was hoping someone may be able to shed some light on.

1. If I buy stock of 10 items and the postage to me is £10. When I sell one of the items how do I factor the postage as an expense? Is it simply dividing the postage by 1o (£10/10 = £1 expense per item) or is there another way to do it?

2. How do I manage when selling new stock bought for profit (that is taxable) with old items around the house (that are not taxable). Obviously all transactions will show on my Paypal statement, and if I omit any would Inland Revenue not query it?

3. How is the best way to calculate electricity expenses? For example 3 hours a night on a PC uploading to ebay as I have been told this is also tax deductable?

Any help would be appreciated as I am very new to all of this

Regards,

S.B

First, if you register with HMRC, ask their advice. There are also start up groups in different areas that have free workshops that would answer all questions. Your local council will/should have details.
Question 1, I'm not entirely sure what you're asking on that one, I think you're asking about the postage when buying ten items rather than selling. The postage, in that case, would be the cost of the item, so if it costs £20 including postage for ten items, each item costs £2. The fact that postage is £x is really irrelevant.

Question 2. If you keep records of items you own and items you purchase then it should be easy to keep separate. You could always have a separate personal business account.

Question 3. Sounds like one for an accountant. If you start penny pinching on certain taxes you may end up paying out elsewhere, ie paying business rates as well as council tax on your property. For the sake of not a lot, it isn't always worth it. As I said, it's one for an accountant, they may have a formula that is acceptable to HMRC.

celestius

distant_smile wrote: »

Hello,

I am looking to set up a business (part of which will involve Ebay) and will be registering self-employed. But I have a few issues that seem to have very vague explanations online and so was hoping someone may be able to shed some light on.

1. If I buy stock of 10 items and the postage to me is £10. When I sell one of the items how do I factor the postage as an expense? Is it simply dividing the postage by 1o (£10/10 = £1 expense per item) or is there another way to do it?

2. How do I manage when selling new stock bought for profit (that is taxable) with old items around the house (that are not taxable). Obviously all transactions will show on my Paypal statement, and if I omit any would Inland Revenue not query it?

3. How is the best way to calculate electricity expenses? For example 3 hours a night on a PC uploading to ebay as I have been told this is also tax deductable?

Any help would be appreciated as I am very new to all of this

Regards,

S.B

1. Yes you can do it that way.
2. I have a separate business bank account which costs me £5.50 per month and a business Paypal account linked to that account. Keeps things simple
3. To date I have not bothered claiming for electricity/internet etc but recently hired an accountant who is going to do all that for me. He is costing me £36 per month.

comberspud

If you purchase 10 items at £10 and postage was £10 then each item costs £2.

If you purchase 100 items at £100 and postage was £20 then each item costs £1.20

Try and get your supplier to sell to you carriage paid. Ask them what quantity you would need to purchase or what minimum total you would need for free delivery.


As for your questions.

I would keep the old things around the house in your personal account. Items which are not bought in to sell on are not needed for tax purposes.

Your electric and broadband bills can be put in as expenses. Keep your bills and put in around 1/5th or 1/4 of the total per year of each in your self assessment.

Just remember your other fees when ebaying..

Insertion fee
Final value fee
Packaging fee
Posting fee
Paypal fee
Cost of item

distant_smile

Thank you everyone for the replies. I now have a lot more info than I did before, I was thinking of speaking to HMRC as well so I think it may be worth listing any other issues and giving them a ring.

May sound a daft question, but as this will only be a small sideline business (I'm not expecting to make thousands a yea, maybe more in the hundreds) would I need a business bank account or can I just use a current account?

Regards,
S.B

the_lunatic_is_in_my_head

There is a permissible flat rate based on hours:

https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home

I wouldn't suggest using bills that are not solely for the business and splitting them.

You could get business broadband (or even just a separate broadband) and claim that as a full expensive but using the flat rates permitted by HMRC are the easiest method.

distant_smile

Thanks once again. The idea was just to make a little bit on the side to put away, I wouldn't expect to make more than £100 profit per month. Due to the lack of funds I have to carry out every step myself, and can't even factor in a £30 a month accountant which is why I am hoping to research it myself so the info on here so far has really helped point my in the right direction.

forgotmyname

Your 3 hours of electric will be approx 2p.

distant_smile

Wow, not really worth wasting time with I guess. Thanks for the info