eBay Tax Return and Stock Held ?

zackary71

So I've registered for 2023/24 Self Assessment for the 1st time, as after 50+ years, I now exceed the £1k / 30 item benchmark by buying goods to resell on eBay. However, I'm unsure on one line of my upcoming Return. I'm employed Full Time, earning £20k+, so already pay Income Tax and NI via my employer. I'm very diligent in my bookkeeping and have complete spreadsheets for all sales and receipts for stock purchases in the event of Audit.

The query is in relation to stock held. At any one time, I might have say £500 as an example of stock for sale. HMRC website seems to indicate this would go under allowance expenses, but other websites are more vague on the issue. (See HMRC info below) I've added example entry figures (not actual ones) and appreciate any assistance.

A - Sales Income 2000
B- Postage Income 400
C - Total Income 2400
D - A Stock Purchase Cost 1000
E - B Postage cost  300
F - B Packing Cost 100
G - eBay Fees on A Sales 200
H - Stock Held on 04/04/2024 for Sale  500
I - Packing Materials on 04/04/2024 held  30
So is my tax bill applied against £270 (C less total of D - I) or £800 (C less D - G) ?
Thanks for any help.

Reselling goods

You can claim allowable business expenses for:

• goods for resale (stock)

• raw materials

• direct costs from producing goods


Costs you can claim as allowable expenses

These include:

• office costs, for example stationery or phone bills

• travel costs, for example fuel, parking, train or bus fares

• clothing expenses, for example uniforms

• staff costs, for example salaries or subcontractor costs

• things you buy to sell on, for example stock or raw materials

• financial costs, for example insurance or bank charges

• costs of your business premises, for example heating, lighting, business rates

• advertising or marketing, for example website costs

• training courses related to your business, for example refresher courses

soolin

The answer depends on your method of reporting accounts. You might be better either speaking to an accountant or even asking on the tax board.

For low turnover though a cash basis is an easier form of accounts, I use it myself. It’s basically all income less all expenses, with the 2 figures being reported on the self assessment giving a net taxable figure. No accounting needed for stock held, it is just money in less money out. If you are using a different method of preparing accounts then I can’t help , sorry. 

zackary71

Thanks soolin. I've posted on the Tax thread. Could you lock/delete the Post please ?

soolin

Will do, good luck, hope you get the advice you want.