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Ebay Shop Query - Business or Personal?

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  • Ebay Shop Query - Business or Personal?

    Hello

    I'd really appreciate some advice please.

    For just over a year I have sold my craft items in my shop on Ebay. My crafting is my hobby as I already have a full-time job (I need to pay my mortgage!). I make salt dough items, wooden plaques and scented wax melts.

    Today I have received an email from Ebay asking me to clarify whether my account is a business one or a personal one. After checking the conditions, it turns out that making items and selling them for a profit is considered a business, which fair enough, but I can go weeks without selling anything and am not exactly making much of a profit overall. If I register as a business will have to start paying VAT and will the Inland Revenue contact me?

    Unfortunately I haven't kept a record of any transactions as I've never looked at my hobby as a business. I'd hate to be in a situation where I have to pay a huge fine because I can't prove what I've actually sold.

    I'm really confused about what to do - do I close my shop and just try selling items individually from time to time or do I register as a business?

    Sadly local craft fairs are always so expensive that I gave up selling at them and opened my Ebay shop instead. I think I opened my Ebay shop in November 2006.

    Please help!


    Emma
    Emma

  • #2
    I had the same email as you today! Must say I haven't read it all yet and declared mine as a business but will do once the wine has wore off!!!

    If you are selling your crafts you do need to register with the IR as self employed, no matter what you make / lose on your crafts. There are some good threads under the Tax section of the forum with lots of advice. Hope this helps!
    Katian Mosaics

    ♥ My Ebay Listings ♥

    My Facebook Page

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    • #3
      Unfortunately, if you make any revenue from something you sell, the Inland Revenue want to know about it. (Even if they are sporadic sales) As to whether that constitutes as a business is debatable, but, personally, I would err on the side of caution and declare it as a business.
      Blog Website Flickr

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      • #4
        If your selling some old like a old tv or sofa etc.. Then is personal..

        If trying to sell things to make money and not just get rid of old stuff then its business..
        .


        Promote your craft site today : Add Your CRAFTS
        (£5.50 a month or £50 per year)

        Fun new blog: Snowboard Stuff

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        • #5
          Originally posted by 0103media View Post
          If your selling some old like a old tv or sofa etc.. Then is personal..

          If trying to sell things to make money and not just get rid of old stuff then its business..
          But even then, I got advised by my IR that if you "make a habit" out of selling stuff like that, it can still be construed as earning revenue from it. That's why I say to err on the side of caution because who knows how the IR work?!
          Blog Website Flickr

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          • #6
            I agree...

            One or two things vs a load of things..

            .


            Promote your craft site today : Add Your CRAFTS
            (£5.50 a month or £50 per year)

            Fun new blog: Snowboard Stuff

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            • #7
              Thank you to everyone who has replied. I realise that in order to keep my shop I am going to have to register it as a business account, but how do I get round the fact that I haven't got written records of my transactions?

              I am now wondering whether to close my shop completely and do some more research, and then perhaps open a brand new business Ebay account in a few months time. If I did it this way then I would contact the Inland Revenue straight away for guidance.

              I'm really confused!
              Emma

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              • #8
                I am sure you are not the first person to be un this situation and the Inland revenue will be able to advise you.
                You will be able to work out some of your history because your sales and purchases through ebay are logged. Similally if you have a paypal account you'll be able to check back.
                full time mum and very very part time crafter.

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                • #9
                  Thanks - I'll spend some time this weekend checking back through PayPal to see if I can actually print off previous transactions. I thought Ebay only kept a record of things for 60 days so I will need to investigate this further. I've got until 30 March to register my shop as a Business account. Not so sure what to do about the craft parts I've bought from various suppliers as I tend to bin the invoices (oops).

                  I've also been reading the topics in the Tax section of this forum and have the links to the Business Link and Inland Revanue website so I'll also study these. The different topics are really helpful and a big thank you to everyone who posts the advice!

                  I'm very tempted to set up a website later in the year (in time for the Christmas season) and obviously this will need to be registered officially so I'm going to make sure that I research everything thoroughly.


                  Emma
                  Emma

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                  • #10
                    Sorry to hijack your thread Emma, but just to point out that the email from ebay also states that if you use your ebay account to BUY things FOR your business, such as beads, material, card, etc, you should register as a business account. I'm sure this will affect more people than just those that have an ebay shop for selling the things they make.

                    Carol
                    Sparklez.co.uk
                    Handmade Jewellery

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                    • #11
                      If you go into your selling account on Ebay, you can view and print off your ebay invoices / transactions (including sales and purchases) by selecting the required month. Mine goes back to March 2007, so yours should go back for as long as you've been buyer and selling.
                      Katian Mosaics

                      ♥ My Ebay Listings ♥

                      My Facebook Page

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                      • #12
                        Originally posted by Sparklez View Post
                        Sorry to hijack your thread Emma, but just to point out that the email from ebay also states that if you use your ebay account to BUY things FOR your business, such as beads, material, card, etc, you should register as a business account. I'm sure this will affect more people than just those that have an ebay shop for selling the things they make.

                        Carol
                        I didn't know that, thanks for that.

                        I have a separate buying account on ebay so I shall have to register that.
                        Blog Website Flickr

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                        • #13
                          Hi Emma,
                          All the above is true, but in addition to this, you should be aware that as soon as you register as a business on Ebay, you will be required to display your name & address on your listings for all to see! A P.O. box number is not acceptable! A lot of people, including myself, are not happy about displaying full name & address on the internet, although I don't mind buyers getting the information as soon as the auction is over & they have won an item. This has effectively put an end to me selling my crafts on Ebay, & even my own website as the same rules apply.

                          Incidentally, it is very easy to make your own free "blog" type website. If you look at mine (Via my Profile), you will see a box at the top right that allows people to make their own blogs. That is how I got into it. A friend directed me to his blog & I followed the instructions & had a blog up & running within 15 minutes.

                          Bob

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                          • #14
                            Shipbuilder,

                            I am curious to know out of interest why you have stopped selling items on your own website because you have to display your address details on it.

                            Have you had bad experience? I know some people are worried that if a customer sees an address, they might turn up at the house unannounced expecting to see a shop.

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                            • #15
                              Hi Emma
                              With ref to the idea of setting up your own blog/website. There is a link on my blog to Feeling Stitchy who has a craft blog school. This is FAB as it shows you step by step how to create a blog for free and how to get the best amount of traffic passing through it.
                              I've only just found it and started looking through it myself but it seems really helpful and (more importantly for me!) easy to understand.

                              Good luck with it all.
                              :0)
                              http://ethelandednastearoom.blogspot.com/
                              http://www.flickr.com/photos/[email protected]/

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