Becoming a sole trader and selling on eBay

stripeyzebra19

Hi all
I am a stay at home mum with 2 young children. I live with my partner who works full time, so currently receiving child tax credits.
I am considering starting a business on eBay/Facebook/Gumtree as a sole trader but have a few questions.
1. As far as I understand, since I am not currently using my personal tax allowance I would be able to earn up to 12,500 in profits before paying tax. Is this correct?
2. I have read about a trading allowance, does that mean I could sell £1000 in sales without registering with the HMRC or paying tax? And this wouldn't affect the child tax credits I receive right? What if I was to go over this amount and sold say £2500. Would I then have to register with the HMRC and do a self assessment but I wouldn't pay tax as it is still under the personal allowance?
3. I don't need to pay National Insurance as long as I earn less than 6,475. Is this correct?
4. Are there any other fees/costs associated with being a sole trader I have missed?

RFW

stripeyzebra19 said:

Hi all
I am a stay at home mum with 2 young children. I live with my partner who works full time, so currently receiving child tax credits.
I am considering starting a business on eBay/Facebook/Gumtree as a sole trader but have a few questions.
1. As far as I understand, since I am not currently using my personal tax allowance I would be able to earn up to 12,500 in profits before paying tax. Is this correct?
2. I have read about a trading allowance, does that mean I could sell £1000 in sales without registering with the HMRC or paying tax? And this wouldn't affect the child tax credits I receive right? What if I was to go over this amount and sold say £2500. Would I then have to register with the HMRC and do a self assessment but I wouldn't pay tax as it is still under the personal allowance?
3. I don't need to pay National Insurance as long as I earn less than 6,475. Is this correct?
4. Are there any other fees/costs associated with being a sole trader I have missed?

Whilst some people on here may be able to answer some or all of your questions you'd be wiser to contact HMRC. They're quite friendly on the phone and would give you advice relevant to your tax code, etc.. Plus, in the unlikely event anything went wrong you can blame HMRC for bad advice which is a whole lot better than blaming an internet forum!

Best of luck with the business.

soolin

The trading allowance is covered here
https://forums.moneysavingexpert.com/discussion/6070793/1000-trading-allowance-is-made-clear-on-tax-return

Otherwise you sound pretty much on the right track, although you would need to prepare very basic accounts you wouldn’t pay tax if your profit is less than your allowances. NI kicks in at a lower rate.

I would also say well done on going about this the right way and looking to register correctly as a sole trader. My personal suggestion would be , assuming you are new to eBay, to open a private account and just buy a few bits and bobs, and also sell a few of your own things to get a feel for how to sell and what works for you as a buyer. Then when you have your business stock in place, and with some feedback and experience behind you, convert that Private account to a business . 

kangoora

This thread might help a bit also

https://forums.moneysavingexpert.com/discussion/6191055/new-seller-advice-needed/p1