Millsy started this topic @ 00:24 on 23/04/2004
I have been buying and selling on Ebay for the past 12 months and would now like to officially setup as a business with the Inland Revenue and get a business bank account etc.
For the past 12 months I have been doing this in my spare time (work full time) and only selling about £100 a month worth of goods making only a very small amount of profit.
To expand the opportunity and make a larger profit I would like to build an online store and advertise etc.
I am aware that once ANY profit is made that you should register with the Inland Revenue but at first I wasn't doing this to make money, only as a hobby.
I have kept all of the invoices from my suppliers for the past 12 months and currently have some stock left over which I will sell 'officially', how can I start the business with stock on hand without declaring previous sales / transactions? Invoices for the stock I have show other items which I have sold in the past 12 months but have not paid tax on.
Does anyone have any advice?
RE: Starting business officially after 12 months
Geoff Westgarth | 23/04/2004 08:13 AM
Millsy
Be careful. You are supposed to register that you've started a business within 3 months of actually doing so. Otherwise, you will be fined (£100 I think)
Good luck with the business
Geoff
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Geoff Westgarth
Practical Business
Tel 01489 786602
email: geoffwestgarth@practical-business.co.uk
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RE: Starting business officially after 12 months
James Smith | 23/04/2004 09:29 AM
If you are only making a small profit on £100 per month of sales (ie £10) then you have only made profits of £120 in the year. This is small enough to be a hobby, and with a bit of creativity you could probably find some other costs to go against it to make the whole venture loss making.
I would suggest you register now as self employed, and include your opening stock at cost. You could actually include your "pretrading" costs and sales in your first tax return to show you are not intending to evade any tax on this. It is not exactly going to be costly in terms of tax to do this.
Geoff is correct that there is a £100 fine for not registering, but if you simply register from now this should not be triggered unless you have a rather zealous inspection looking to the letter of the law.
Regards,
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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RE: Starting business officially after 12 months
Millsy | 25/04/2004 02:22 AM
quote:
Originally posted by James Smith
If you are only making a small profit on £100 per month of sales (ie £10) then you have only made profits of £120 in the year. This is small enough to be a hobby, and with a bit of creativity you could probably find some other costs to go against it to make the whole venture loss making.
The problem is would I have to show all this for the past 12 months or would it be better to start from scratch as though the last 12 months haven't happened? Ideally I would like to start from scratch but having stock on hand is a problem!
quote:
Originally posted by James Smith
I would suggest you register now as self employed, and include your opening stock at cost. You could actually include your "pretrading" costs and sales in your first tax return to show you are not intending to evade any tax on this. It is not exactly going to be costly in terms of tax to do this.
How would I do this? It would mean I would have to go back and record any costs of the business when all I really have is Supplier invoices and customer receipts. Is it possible to record an opening stock balance at cost without supplier invoices (which include 'sold' items?
quote:
Originally posted by James Smith
Geoff is correct that there is a £100 fine for not registering, but if you simply register from now this should not be triggered unless you have a rather zealous inspection looking to the letter of the law.
Yes I am aware of the £100 fine for not registering, had I known that I could make any profit from this I would have done so from the beginning.
Thanks for your help.
RE: Starting business officially after 12 months
Norbert | 25/04/2004 10:53 PM
Is it actually possible to make a living/profit on ebay? With extortionate listing fees and competative prices is it viable?
I have sold stuff on ebay, and thought wow this is a great way to make some (easy) money. Then i sat down and deducted non sold item listing fees (often repeated), Paypal fees, selling fees, fuel costs to PO, Undercharged postage, the odd bottle of wine (or three) to ease the stresses and strains of non paying bidders and most importantly time. All of these eat into profits, and i belive most people sell on ebay for a hobby and pocket money, and do not take the above considerations into account.
please correct me if i am wrong, and if your making money from it Millsy, then fair play to you. (Just let me know what i'm doing wrong on eBay)[
]
RE: Starting business officially after 12 months
Millsy | 26/04/2004 12:52 AM
quote:
[i]Originally posted by Norbert[/i]
[br]Is it actually possible to make a living/profit on ebay? With extortionate listing fees and competative prices is it viable?
I have sold stuff on ebay, and thought wow this is a great way to make some (easy) money. Then i sat down and deducted non sold item listing fees (often repeated), Paypal fees, selling fees, fuel costs to PO, Undercharged postage, the odd bottle of wine (or three) to ease the stresses and strains of non paying bidders and most importantly time. All of these eat into profits, and i belive most people sell on ebay for a hobby and pocket money, and do not take the above considerations into account.
please correct me if i am wrong, and if your making money from it Millsy, then fair play to you. (Just let me know what i'm doing wrong on eBay)[]
You are absolutely correct in that it can be very expensive to sell on Ebay and taking the above costs into consideration (and more!) very little profit is actually made.
As far as I can see the best sellers on Ebay focus on delivering excellent customer service for that all important feedback. I also choose my items very carefully and set at a price which will sell.
If I am going to make a profit in the future in my opinion it would have to be mainly off Ebay, although Ebay remains a fantastic way to get noticed and drive people to your own site.
