Brexit question - registering with HMRC for EORI but still under £1000 turnover (+ mortgage pending)

anxioussquirrel

Here's the situation - in March I was put on furlough and I got to spend more time on my creative hobby, on which I ended up started making a little bit of money. I sold some products in the EU and now I want to keep trading with these clients, however I do not have an EORI number, because I have not yet registered with HMRC for self-assessment. The reason is that I'm still quite a bit under the £1000 turnover trading allowance and I want to put off registering until as late as legally possible because I'm also in the process of applying for a mortgage (while still on furlough) and I don't want the lenders to think that I don't expect to return to work, or that there's any change in circumstances I'm not telling them. 

The question is - can I still export without an EORI number, if I claim to be a "private person" or somehow declare that the goods are sold under the trading allowance? The second question is - if I do need to register, because eventually I hope to make more money, but the house move is not complete (it's been going on for a while due the building) would there be a problem? I really want to move and do not want this sale to fall through, I need the space to keep doing this! Yes I know it's risky on furlough anyway but I'm not applying alone, I just don't want my shenanigans to cause any issues.

Thanks a lot for your advice.

MDMD

Probably best that someone moves to the Cutting tax board- there will probably be more detailed knowledge on there, but my understanding is that any goods dispatched to the EU from the UK needs an EORI number.

Note that you need to separate out the VAT/Customs/Export EORI rules from the Income Tax Trading Allowance rules. They are completely separate and should not be conflated arbitrarily.

So whether or not you need an EORI number should have no bearing on the trading “allowance” and vice versa.

anxioussquirrel

Thanks for your reply, sorry if I put it in the wrong forum. I'm not conflating the EORI/VAT with the income tax trading allowance, I just suffer from wishful thinking a bit haha. The problem is that I cannot get the EORI without being registered for self assessment (you need to be a proper business with a UTR number to get the EORI). However, I have put off registering so far, because I haven't had to because of the trading allowance and also because of the pending mortgage application. So I just wondered if there was solution to it (e.g. would I not count as a non-business, "private individual" sender) but maybe that was a far-fetched wish if no such route exists. (Does it mean though that I cannot even sent a gift to my friends and family members living in EU countries? )

I have suspended shipping to the EU for now until it's clear what I have to do, it's only been one client so far but I was hoping it to be a regular one so I need to sort it soon. I certainly don't want to damage my prospective business with not being able to ship to the EU (and I hope to cross this trading threshold some time in the near future). If I have to register before my mortgage is sorted, would it be a problem for the lender? I will be devastated if anything more happens to this purchase. I want to wait until at least that is sorted and I'm basically looking for a short-term "bridge" solution to make it possible not to lose the EU client while I'm waiting for the right time to register with HMRC and sort my EORI number but maybe that was wishful thinking. 

Annie848

you only need the number if you use a courier or click and drop with royal mail. if you post at the post office either at the counter or with a drop and go account you don't need to register for a number 

anxioussquirrel

Annie848 said:

you only need the number if you use a courier or click and drop with royal mail. if you post at the post office either at the counter or with a drop and go account you don't need to register for a number 

For real? That sounds like an interim solution, thanks! Probably more expensive than the couriers I'm using right now haha but it will do to keep the trading open until I sort it. Thanks! 

General_Grant

Annie848 said:

you only need the number if you use a courier or click and drop with royal mail. if you post at the post office either at the counter or with a drop and go account you don't need to register for a number 

Can you point to confirmation that packages sent by RM to Europe will not be examined by Customs staff and need the number?

Savvy_Sue

I can't see why a supplementary self-employed income will make the least difference to a mortgage application. HOWEVER, a lot of mortgage providers do not allow businesses to be run from home, so that may or may not be a future issue. 

anxioussquirrel

Savvy_Sue said:

I can't see why a supplementary self-employed income will make the least difference to a mortgage application. HOWEVER, a lot of mortgage providers do not allow businesses to be run from home, so that may or may not be a future issue. 

Thanks! Wait, what? Would a mortgage provider have issues with a small craft room? I understand it would be different if I planned to open something public facing or if I had employees but it really would remain a residential property just with a maker space. I will definitely not register until the moving is done now haha (unless I cross the trading allowance until then but that's very unlikely and I really, really hope to move soon, it's been going on for so long now...!) 

Savvy_Sue

anxioussquirrel said:

Savvy_Sue said:

I can't see why a supplementary self-employed income will make the least difference to a mortgage application. HOWEVER, a lot of mortgage providers do not allow businesses to be run from home, so that may or may not be a future issue. 

Thanks! Wait, what? Would a mortgage provider have issues with a small craft room? I understand it would be different if I planned to open something public facing or if I had employees but it really would remain a residential property just with a maker space. I will definitely not register until the moving is done now haha (unless I cross the trading allowance until then but that's very unlikely and I really, really hope to move soon, it's been going on for so long now...!) 

It's not the craft room they'd have an issue with, it's the running-a-business-from-this-property-in-which-we-have-a-financial-stake. 

From what you said earlier, you are hoping / planning to increase your income from this craft enterprise, with the intention of giving up your day job. 

Whether they'd ever find out is of course open to question. It can be a massive issue for people who are renting from private landlords, because the private landlord has a clause in their buy-to-let mortgage which forbids allowing the tenant to run a business from the property. A social landlord would not unreasonably refuse permission. 

I do not know how much room for negotiation you will have. 

You would need to consider insurance for your stock of materials and finished goods. Domestic insurance won't cover it. and while that's a separate issue, I would suggest that you do NOT take out insurance through the mortgage provider. They can require proof that you've got buildings cover, but keep your contents separate unless you've got their agreement. 

anxioussquirrel

Savvy_Sue said:

anxioussquirrel said:

Savvy_Sue said:

I can't see why a supplementary self-employed income will make the least difference to a mortgage application. HOWEVER, a lot of mortgage providers do not allow businesses to be run from home, so that may or may not be a future issue. 

Thanks! Wait, what? Would a mortgage provider have issues with a small craft room? I understand it would be different if I planned to open something public facing or if I had employees but it really would remain a residential property just with a maker space. I will definitely not register until the moving is done now haha (unless I cross the trading allowance until then but that's very unlikely and I really, really hope to move soon, it's been going on for so long now...!) 

It's not the craft room they'd have an issue with, it's the running-a-business-from-this-property-in-which-we-have-a-financial-stake. 

From what you said earlier, you are hoping / planning to increase your income from this craft enterprise, with the intention of giving up your day job. 

Whether they'd ever find out is of course open to question. It can be a massive issue for people who are renting from private landlords, because the private landlord has a clause in their buy-to-let mortgage which forbids allowing the tenant to run a business from the property. A social landlord would not unreasonably refuse permission. 

I do not know how much room for negotiation you will have. 

You would need to consider insurance for your stock of materials and finished goods. Domestic insurance won't cover it. and while that's a separate issue, I would suggest that you do NOT take out insurance through the mortgage provider. They can require proof that you've got buildings cover, but keep your contents separate unless you've got their agreement. 

OK thanks. What I don't seem to understand is that loads of people run their businesses from their own home with a mortgage, and I don't understand how it's up for negotiation with the lender what I would do in the home I bought? I will not rent (I am not renting now either), we just want to move house for various reasons - only one of them is my wish for an extra room. I have already looked at business insurance online when I started trading and it did not seem to be too expensive or complicated and there seems to be plenty of insurers to offer the kind of cover I need. I'm really not sure why this would be a problem for a lender.

The first thing I want to do after registration (apart from an EORI) is a business bank account and they come with credit checks, that's one other reason I want to postpone "going official" until the house move is complete anyway. After all this information, I feel like that should just suspend trading until the move is sorted if I come close to the trading allowance threshold for some unlikely reason haha!

I do have plans and ambitions to grow the business but I'm not about to give up the day job or take out more risks than I have to (but we're writing this in 2020 huh!) Nevertheless the mortgage is an absolute priority, the business is a close second!