Sole Trader Profit

enjoyyourshoes

Hi, it might be worth getting some additional support/training before you embark on this additional sideline.

I am sure locally there may be either government supported schemes for managing a start up or courses in book keeping or accounts?

Do you know an accountant who may be able to give advice, especially on second income etc?

Patrick05021989

I think you are right, I am struggling here and I am sorry about that....

In simple terms then:

Purchase price: £3
Sale price: £10

P&P: £3.6 ( charged for in the £10 sale price )
Paypal fees: £0.54
Ebay fees: £0.9

Do I need to pay tax on the:

A) £10 - £3 = £7 ( £1.4 due in tax )
£10 - £3 - (£3.6 + 0.54 + 0.9) = £1.96 ( £0.39 due in tax )


Many Thanks

[Deleted User]

Patrick05021989 wrote: »

I think you are right, I am struggling here and I am sorry about that....

In simple terms then:

Purchase price: £3
Sale price: £10

P&P: £3.6 ( charged for in the £10 sale price )
Paypal fees: £0.54
Ebay fees: £0.9

Do I need to pay tax on the:

A) £10 - £3 = £7 ( £1.4 due in tax )
£10 - £3 - (£3.6 + 0.54 + 0.9) = £1.96 ( £0.39 due in tax )


Many Thanks

In very simple terms:

Turnover £10.00
less purchases (costs of sales) £3.00
Gross Profit £7.00

less expenses £5.04 =

Net Profit £1.96

Tax due £0.39.

Patrick05021989

Thank you!

Looks like I am on the right track in my head - just getting all of those terms mixed up!

So back to paypal fees - is the £500 allowable bank charges limit ( in cash basis accounting ) applicable to paypal fees?

I've read on another forum that the limit is only applicable to the interest on loan repayments/overdraft charges etc.

Thank you all

enjoyyourshoes

Go get some training !

At every turn , you can not post a question, as accountancy is quite technical.

Patrick05021989

00ec25 I think you must have edited your post at the same time as I've posted mine - I didn't see the bit around the bank charges - again, a perfect clarification from yourself.

Thank you all very much, really appreciate your help.

Since I am in a full time employment it is difficult for me to attend courses.
Are there any books that are worth recommending? Particularly focusing on the cash basis accounting.

I will be more than happy to read in my spare time:)

00ec25

Patrick05021989 wrote: »

00ec25 I will be more than happy to read in my spare time:)

this will be a start .....
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim70000

what you need to know about deductions and tax returns is another story