I was watching an interesting discussion from a Tax expert on the TV this morning, apparently the UK Govt. is investigating sellers on Ebay, Amazon and other such online sites to find unregistered sellers, not people clearing out their loft or shed but those, in our case, selling guitars and CD's or other accessories online or at Fairs and markets.
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You can register online here:
https://www.gov.uk/set-up-sole-trader
The chances are if you are, like me, only selling a few items here and there and not making much money, you will still have to register yourself and you probably won't have to pay any extra Tax or National Insurance at all but it is an offence not to be registered as a Sole Trader, most advertise online or attend markets and are easy to trace.
If any experienced sellers out there have any further advice post here, I will post my response from Gov.UK when I hear anything, and hope hey don't mind if I missed the last end of tax year last October since I started selling guitars..never mind the CD's..;-)
Replies
believe it or not this is old hat. they have been chasing power sellers for a couple of years now.
have a looky at this......
http://www.simplybusiness.co.uk/knowledge/articles/2011/06/2011-06-...
http://money.aol.co.uk/2012/06/06/ebay-sellers-get-one-week-warning/
what goes around as they say....the good news is i'm back in part time employment again :)
thats good
MARK & STEVE
I suggest you listen to this weeks BBC radio 4 Money box Live it covers your points.It all about the intention to make a profit, if you are selling of possessions, its unlikely you will recover the original cost, so no profit. But if you are buying or making thinks to sell, with the intention of making a profit that is different.
I am registered as self-employed and operate as part of a partnership. As others have said, your tax liability will depend on how much you earn but you will be hit for Class 2 National Insurance at £145.75 a year. If you register as a sole trader, you will be required to submit a return annually.
I pay a tax advisor £250 to submit my individual return and the partnership also uses an accountant. If your financial affairs are simple, self-assessment is easy. If they are more complicated, specialist advice may help.
I've always found that HMRC are OK to deal with as long as you comply with their requirements. If they suspect that you're on the fiddle, they can be very persistent. I understand that VAT can be tricky but I am not VAT registered.
I know that personal taxation can grate when you see the legal loopholes that are exploited by multinationals, but it's just one of those things.
If your earnings from self-employment are less than a certain threshold (£5,725 I think) then you don't have to pay Class 2 NI - you just have to apply for exemption, which is straightforward.
I've been registered as a sole trader for quite a few years now and it's been no problem. I also have a regular job where I'm part of the standard PAYE and NI system. The sole trader registration just makes sure I'm legit if I make any additional income. Because my income isn't above a certain level I only have to fill out a simplified version of the annual tax return. No big deal. (True though that it doesn't make it any more tolerable when you see mutli-billion dollar companies using loopholes to pay peanuts.)
Can't imagine that VAT would be an issue for anyone just doing a few CBGs (even a lot of small full-time businesses don't go over that threshold).
I think the people HMRC are after are the ones who are very clearly running a business and not average Joe Public who flogs a few surplus possessions. It doesn't take a genius to spot the sort of people I'm talking about - indeed I wouldn't be surprised if HMRC were experimenting with automated software to scan eBay and the like for accounts with substantial patterns of trading. And they're as concerned as the rest of us about what return they'll get for their effort. So if someone has a couple of hundred transactions to their name in a year then maybe they should think about whether they could be in trouble. If you're one of the millions of people who've just sold a few moderate value items then it's really not worth their while bothering to look at you. And, honestly, I don't believe there is any point in building CBGs to sell unless you're going to do it as a proper business. So it makes sense for guys like Chickenbone John who are geared up to do it on a certain scale, but for those of us just doing it as a hobby it's nuts to think you can make a genuine profit.
many thanks for your comments Mark - will follow this along but like you say they may be after the bigger fish ;-)
thanks Digly and everybody - will be reporting back to this thread in the near future...unless they come and bang on my door! ;-)
I'm self employed to and I keep all my paper work in order as well as my books etc.
If you're in business, you must register for VAT if your VAT taxable turnover for the previous 12 months is more than £81,000. so I wouldn't worry about that.
as your honest and declare your income inc pensions no matter how small it is you'll be fine.
if you have been doing business say 3 years and not declared it best to do so now.
in 2011 it was around £7300 so if you've earned that or less you wont pay tax but NI you will have to pay them.
the chances are if you have earned less than what is allowed which currently stand at about £10,000
http://www.dailymail.co.uk/news/article-2296256/BUDGET-2013-Rise-ta...
personal allowance will go up further to £10,500 in 2015-16.
what you've got to remember to is being self employed that you will have to pay two national insurance,the tax one is is different but you still have to pay.
it is not bad as people make it out to be but if you try to fiddle then you will be in big trouble.
they will come down on you like a ton of bricks.
when I've rang them for advice they were very helpful ,even went through with me in filling my forms.
I've now got an accountant to fill it in for me now and save me a small fortune.
when I finished filling in the tax form this year they wanted nearly 3 grand in tax. so I manage to find an account just to fill in my tax returns. I do all the counting etc .just gave the finalize papers etc and ended up only paying £650! so the tax man owes me money from the last few years but I've decided to write off.cant be ass to chase it all and I don't want the aggro of refilling forms etc.
just keep your records and declare what you've earned you'll be fine.
thanks John, I think i'm well under the level they're after, but when you get a hedzup on national TV something's going on..! ;-)
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