Ebay self-employed advice

RFW

distant_smile wrote: »

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.

You don't need a lot of expense. For a bank account, you can technically have any bank account, it's probably wise to tell the bank that it would be for a business. You certainly don't need to be paying for one. Most banks offer free business banking but will try and upsell you something you don't need.
Keep your accounting simple and you won't need an accountant, if you start claiming for electricity and wear to your shoes going to the post office, you'll probably go insane and save four pence a year.

As I said earlier there are loads of places to go for help, either your local council or library would be a good first stop to find out.

mrcol1000

Run a business with much more income than yours but a lot less than making me need to worry about being VAT registered. Do not need an accountant. I just use excel to keep all my records and work everything out.

Using your home for business use, you keep a record of the number of hours you work a week. That is everything from dealing with stock to record keeping. You then get an allowance per hour which is taken off any tax you need to pay.

HMRC provide a lot of information on being self-employed. It seems a lot to take in but it really is not that bad. If you opt for doing your tax return on money you take in and money you pay out, then it is pretty straight forward. Especially if you do not have to deal with VAT (I think you need £60k+ income) and you do not employ people or claim allowances for machinery etc...

Just remember to have some kind of record of every penny that comes in and every penny that goes out. There are many organisations, local and national, that will offer you advice. It is really very easy to do it all yourself without an accountant, especially on the level of income you think you will have.

bxboards

I also do not use an accountant - all my accounts are done on a spreadsheet (Libreoffice) which I update around once a week. It totals itself up, so I have everything I need for my annual tax return which makes life easy.

I allocate around 20 a month of my electric costs to my business, I think last return for electric was 240.

I don't mix personally owned and business items, I would have seperate Ebay account for that, although I see no reason why the same Paypal account can't be used for both.

comberspud

VAT threshold is now £81k

goodfella66

I went on an HMRC self-employed accounts seminar years ago and to work out the gas/electric you can claim, if you work from home, you count up all the rooms in your property (all kitchens and bathrooms count as a total of one) and divide your bills by that amount.

Example: 3 Bedroom House

3 bedrooms, 1 lounge, 1 kitchen and bathrooms = 5 rooms.
£100 Bill divided by 5 means you can claim £20.

distant_smile

Thank you that's really helpful. I did have one last question, it may be an obvious one but just thought I would check:

If I bought an item for £10 and it did not sell, I then decide to cut my losses and sell at £5 (below cost) just to be rid of it. I take it I would not declare it as no profit was made? Or do you have to record it as a loss?

Regards,
Sb

celestius

RFW wrote: »

You don't need a lot of expense. For a bank account, you can technically have any bank account, it's probably wise to tell the bank that it would be for a business. You certainly don't need to be paying for one. Most banks offer free business banking but will try and upsell you something you don't need.
Keep your accounting simple and you won't need an accountant, if you start claiming for electricity and wear to your shoes going to the post office, you'll probably go insane and save four pence a year.

As I said earlier there are loads of places to go for help, either your local council or library would be a good first stop to find out.

Which banks offer free business banking? When I separated private from business most business accounts come with charges...

I am taking on an accountant this year because I am getting close to the VAT threshold and getting nervous about the sums of money I am dealing with. It has taken me years to get to this point! I thought I could pay for him for a year, he will set me up for future tax returns and simplify my accounting, show me exactly what I should be doing.

comberspud

If you sold at £5 then that £5 gets added to your sales total.
Total sales from April to April minus total expenses April to April = Profit.

You're allowed your personal allowance off this (£10000)
So any profit over £10000 is taxed basically.

Just remember you have NI to pay also. Allow around 9% for this.
So basically 29% of the profits over £10000 you give to the gov.

So roughly
If you sold £40000 worth of goods.
You made £20000 profit
Your expenses are £20000 (every cost in business)
Then £10000 is taxed (your have a £10000 Personal allowance)
So NI and tax would roughly be £2900

distant_smile

Thank you. My personal allowance of tax is used by my full time job so any additional income from the site will be taxable. I understood it that if my profits were going to be below £5700 per annum (can't remember the exact figure) then I would not pay NI?
Regards,
SB

comberspud

Just to add.
You said your item cost £5
Is this the total cost after sold

If you are selling on ebay for £10
Ebay fees are £0.80
Insertion is £0.10
Paypal is £0.44
Postage ????
Item cost - £5.00

If large letter under 100g
Total - £6.34 + £0.94 = £7.28

If small packet under 100g
Total - £6.34 + £3.20 = £9.54

These are first class prices of the lowest weights for each category.

It may be even more for a non business / non shop on ebay.