eBay Self Assessment and Stock Held Q. ?

zackary71

Posting here, as better suited for advice on this Forum. 

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

Brie

I find your list of income and expenditure a bit too hard to get my head around right now.  But I thought that if you had 1 column with all the income items and another of all the expenditure then all you need is to get the difference between the two.  Profit you pay tax, no profit no tax but maybe get a rebate elsewhere?

DullGreyGuy

How you deal with stock depends on if you are doing cash accounting or accrual... most sole traders do cash accounting. 

Under cash accounting buying stock is an expense and immediately reduces your profit

If you were doing accrual accounting then you dont reduce your profit by buying new stock because you are still holding the stock which is just a different class of asset on the balance sheet. 

zackary71

Appreciate all the help. Thanks again