tax on comission, selling on behalf someone else

John00

Hi!
I'd like to sell the items online on behalf of someone else, who is internet illiterate, but I am not employed by them.
The items are collectables and the selling price would be high. I'd get as small commission from it. All the money from sold item will go to my bank accounts first.
How do I go about tax in this situation? How do I prove that I only earn a small amount of that money and the rest is not my profit? If I start getting a big turnover in my bank account will my bank start ringing alarm bells? Or should i just get business bank account instead?
Thanks!

Mistral001

If you are making commission then that is your earnings and that is all you have to pay tax on. Your bank account is irrelevant as far as HMRC is concerned and they do not have access to it unless they suspect a crime is being committed as far as I know. You should keep detailed records of transactions so you might have to employ an accountant or bookkeeper.

Spuggy200

Like a dropshipper almost? As above, you just pay tax on what is left over (profit). You could technically have 100ks going through you account but if 100ks go out apart from 1-2% then that's all you pay on. Although you might want to pop into your bank and explain the odd transactions in case they block your account for fraudulent activity.

Aquamania

John00 wrote: »

Hi!
I'd like to sell the items online on behalf of someone else, who is internet illiterate, but I am not employed by them.
The items are collectables and the selling price would be high. I'd get as small commission from it. All the money from sold item will go to my bank accounts first.
How do I go about tax in this situation? How do I prove that I only earn a small amount of that money and the rest is not my profit? If I start getting a big turnover in my bank account will my bank start ringing alarm bells? Or should i just get business bank account instead?
Thanks!

As with any business, you are only expected to pay tax on profit.

In the most simplest form this means your commission, but you probably can reduce that liability further by reducing your profit due to expenses you incur in running this little business.

An accountant will help you if you are struggling - and the accountant's cost is tax deductable too!

Any bank will probably start asking questions if they spot irregular or unusual activity - especially if large sums are involved or frequent transactions. Most (all?) personal accounts prohibit their use for business purposes.