Tax self assessment.

p6steve

For the last year or so I have been selling hifi separates online on a variety of sites - FB marketplace, Gumtree and eBay  - some for friends, some of my own personal collection, and some things I’ve bought and repaired. I appreciate I have probably made more a few more quid than I should have before declaring it but have absolutely no idea how much I have made, where and when I sold it, whether it had been in my possession for a number of years or whether it was bought and sold to make a profit.

For these reasons I’d like to start doing it properly, keeping track of what I sell, when I sell it and how much I sell it for to be able to pay what I owe HMRC.
Ive looked on the GOV website and it’s a bit of a minefield.
So a few questions…..
When does the financial period run from/to?
How do I register my interest?
What sort of records do I need to keep?
I appreciate I’m only a small fish in probably a much bigger pond, but I believe I have found a niche in the market and want to make sure I’m not going to be stung in the future.
I have already started putting 20% of everything I sell into a savings account in preparation for the big day 😁

droopsnoot

The tax year runs from 6th April to 5th April the next year. You could run your own financial year on different dates if you wanted to, but I just use the normal tax year. Are you employed and doing this as a sideline? If you are, and your profit isn't massive, you might just be able to give HMRC the figure and they'll adjust your tax code for next year to take the appropriate tax through your PAYE.

You can register for self assessment on the government web site, if you need to. Get a Government Gateway ID first, and go from there. https://www.gov.uk/log-in-file-self-assessment-tax-return

This page has some information on who needs to register for self assessment: https://www.gov.uk/self-assessment-tax-returns

How much record-keeping you need to do depends on how much business you're doing. You should keep the record of when you buy something, and when you sell it, and receipts for any allowable expenses - items you buy to repair the equipment for example. There's guidance on what's allowable, and it can get quite complicated, if it needs to.

But, none of the above should be taken as tax advice, I'm not qualified to give that. There's plenty of stuff to read, and maybe a local accountant would provide a low-cost advisory service if you're not confident you've covered everything.

p6steve

Many thanks. I have registered and am awaiting the paperwork! Not as difficult as I thought it would be 😁

chrisbur

droopsnoot said:

The tax year runs from 6th April to 5th April the next year. You could run your own financial year on different dates if you wanted to, but I just use the normal tax year. 

The option to run on any year has now been removed you now have to run with the tax year.

dinosaur66

you will need to look up you tube a few times when first filling out a hmrc tax return for the first time but in your case

it will be quite simple as 90% of the questions will not apply to you

you have started keeping records thats good

on ebay you can just click on your sales and track to the penny what you have taken

facebook marketplace / not sure if that is monitered might be but i would guess just looking for true larger business and not someone like yourself but easy to look back through past sales.

basic accounting in your case woud be a4 book

month by month march 31st to march 31st when on ebay is easier to do on a monthly basis /hmrc do not mind and you put these dates into the box hmrc asks when is your tax year made up to

you put your takings for month

for a business seller you put down

10% sales fee + 20%vat / 36p item sold fee this includes the vat/returns and lost post -only allowed to charge paid for price and postage/stationary fee/postage fees/price which you paid for item -you do not need receipts if you never got them when bought/there are other fees like operating fee very small fee/ add all costs / then subtract from takings and put down the figure for the month and do this with all your selling sites .

this is basic but fine as droopsnoot pointed out there are many other l things you can claim for like motoring costs if you have to travel when buying /selling to get your taxbill down /but some are claimable and some not / when doing your tax return they give a explanation you can click on under nearly every figure box /

hmrc will not ask for any of your paperwork

the only figures you submit looking at what you have said will be total takings

and total outgoings

they do not ask for the workings of how you got to those figures/

you keep the records and paperwork yourself for minumum of 6 years in case they do ask you questions at a later date.

droopsnoot

dinosaur66 said:

hmrc will not ask for any of your paperwork

the only figures you submit looking at what you have said will be total takings

and total outgoings

they do not ask for the workings of how you got to those figures/

Well, unless they decide a bit later to do a self-assessment check, then they'll ask to provide some proof of the figures. I had one of those a few years back, they were quite reasonable about things that I couldn't produce receipts for as the numbers in my case were relatively small. Better to have them and not need them, than the other way around.

dinosaur66

i was called 3 times into stratford tax office in the 80s and 90s for similar reasons

cassette taped interviews

just routine qustions as i was one of the only street market traders who was declaring earnings -mainly due to them raiding all the newham markets over and over in the early 80s making me go legit.

once had national insurance inspectors in approx 1986  knocking on my front door because i was a few £5 stamps short in my national insurance post office stamp book return for the year.

 from memory about 7 stamps short so £35 in value and they came round my house to collect

trouble was i lived in stratford and was right on there doorstep

LITRG

Hello. We are the Low Incomes Tax Reform Group (LITRG), part of the Chartered Institute of Taxation, who are an educational charity. We are not part of HMRC or MSE. Although we can’t give individual advice, you might find our  tax guide on self-employment helpful:  https://www.litrg.org.uk/working/self-employment/self-employment-guide . If you require further help, we recommend that you contact a tax adviser, HMRC or one of the tax charities where relevant. You can find more information about where to get help with tax here: https://www.litrg.org.uk/tax-nic/getting-help-tax. Thanks.

p6steve

Thanks for all your comments and advice. So if the tax year runs from April and I don’t start this side hustle in earnest until 1st of January this year, I guess I don’t have to worry about any self assessment now until the end of this year or do I need to do something to cover me from January to April?

droopsnoot

If you've started on January 1st 2025, that is the 2024/25 tax year, and the deadline for self-assessment if you're doing it yourself online is 31st January 2026. So you'll need to keep the records for this partial year on 1/1/25 to 5/4/25, then report them to HMRC by 31/1/26. You can do the return any time after April 6th 2025, of course, you don't have to be like me and leave it until half way through January.

Dazed_and_C0nfused

And a tax return is for all taxable income, not just self employment.