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  • is my website a business and do i need register with the ir

    hi,
    i am new here and would like some help before i go getting myself in trouble lol.

    i make halters for model horses and have been selling them on ebay for a couple of months, 2 weeks ago i decided to set up my own website for them and so far have sold only 2, i am unemployed due to being disable and i enjoy making them for my own collection as a hobby but i thought as others on ebay buy them i would sell them on my own site.

    my website is a free site, not a paid domain if this makes a difference

    now i was talking to a friend today and they told me i have to register with the inland revenue as a business even though i dont see it as a business and more of a hobby that i share with others.

    could you please help me, do i have to reister with the inland revenue and what other steps should i take?

    i would appreciate any help no matter how small

    thank you
    sam

  • #2
    you have to register with the tax man within three months of making your first sale.
    www.corrigancards.com


    A mind is like a parachute........it only functions when open

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    • #3
      Hi and good luck with getting your business up and running.

      Yes its true you do have to register and file a tax claim no matter how little you sell. It only takes a phone call to register and you have three months from the date you started before you need to register.

      Pauline
      Personalised Wedding Cake Toppers

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      • #4
        As others have said, you need to register with the tax office within three months of the date which you started trading (personally I viewed this 3 month period as my chance to 'have a go' and find out if it was worth doing so!).

        Beyond that, there isn't really anything else which you have to do at this stage.

        However you might want to search Google for 'Business Link' - they have some good info on starting your own business, and it can be quite helpful to have a read through and shed a bit more light on other responsibilities etc, which you may run into in the future.

        Running a small business, e.g. self-employed selling crafted goods, shouldn't produce a vast amount of paper work though (except possibly tax return).
        --Matt

        Web Development
        Beads, Charms & Findings - Jersey Craft Shop

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        • #5
          Ebay says the following about business

          'You should register as an eBay business if you:
          - sell items that you have bought to resell
          - make items yourself and sell them (emphasis mine)
          - intending to make a profit
          - are a Trading Assistant
          - buy items for your business '

          The taxman knows about the 'loophole' of selling on Ebay and personally I would advise you to sign up as a business than get caught and have to explain yourself.

          To take that a step further and sell on your website is business. If done as a hobby you may only generate small amounts of money then your tax forms should be simple and NI contrib small.
          So start saving any receipts - make sure they match when you registered as a business!

          Believe me I dont like the taxman in my life but I like hefty fines from him even less

          I wish you success at your hobby/business and above all I hope you continue to enjoy what you do
          Terry xxx
          You can't have everything. Where would you put it all?" - Steven Wright
          Website Twitter Facebook Blog Folksy

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          • #6
            yes, you will need to register with the tax office
            you can also ask for a form to fill in to be exempt from paying national insurance if you are making under a certain amount - not sure of the figures but think it's around £4000, but please double check that!
            Fiona
            http://www.samigailsgifts.co.uk/
            Handmade personalised gifts for all occasions created by the art of pyrography
            My Facebook

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            • #7
              Going to disaggree with most of you on this one,
              The poster said they dont expect to run this as a profit business, so if the profit is tiny or a loss its a hobby, all that needs doing is to notify the tax if for some reason you make a significant profit,
              Just keep very clear records of income and outgoings, a diary will suffice.
              The bigger problem you may have is with the jobcenter, because you are doing work when claiming that you are physicaly unable.
              I do hear that in certain circumstances this is alowed but they must be informed, I would go talk to them, they well may look on the venture as a way back into work for you, who knows there may well be a grant available

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              • #8
                thanks

                hi all.

                thank you all for your comments and advise,

                i may wait a month or so to see how it goes first as i have only sold 8 in total on ebay in about 3 months. and 2 from my site last week, those 8 may sound ok but concidering i have listed about 40 on ebay makes it a low amount in my mind, i dont know what you think about that. in total i have made a profit of about £20 for all sales after taking out what it cost for materials and ebay fees.

                urbtaf, thank you for your comments about the jobcentre, that was very true, i am claiming dla (disabilty living allowance) and with that benefit you can work full time and still claim so i know i am ok with that.

                thanks again
                sam

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                • #9
                  i make halters for model horses and have been selling them on ebay for a couple of months, 2 weeks ago i decided to set up my own website for them and so far have sold only 2, i am unemployed due to being disable and i enjoy making them for my own collection as a hobby but i thought as others on ebay buy them i would sell them on my own site.
                  If you're on DLA or registered in any other way check with Citizen's Advice or any other suitably knowledgeable body as you could be allowed what used to be called "Therapeutic Earnings" up to a stated amount.
                  ElaineJ soap and other stuff
                  website
                  blog

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                  • #10
                    My understanding is that if you sell your products, then you're a business. You would need to register with Inland Revenue whether you're making a loss, a small profit or a big profit and you need to register within 3 months of beginning trading.

                    From the Business Link website:
                    Income tax and National Insurance

                    As a sole trader you have to:
                    • register with HM Revenue & Customs as self-employed
                    • complete a self-assessment tax return every year
                    • Pay Class 2 and Class 4 National Insurance contributions (NICs)
                    At the end of the day, all it really means is keeping basic profit and loss accounts - which you really should do anyway - and filling out a tax return once a year (which you can do online and takes half an hour MAX if you keep good records!).

                    So registering with the tax man is NOT a big deal, but failing to register with the tax man could be a big deal if you end up being fined £100 for avoiding it!!
                    Carol

                    Resin jewellery, encaustic art paintings & gifts | Twitter!

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                    • #11
                      Originally posted by urbtaf View Post
                      Going to disaggree with most of you on this one,
                      The poster said they dont expect to run this as a profit business, so if the profit is tiny or a loss its a hobby, all that needs doing is to notify the tax if for some reason you make a significant profit,
                      Just keep very clear records of income and outgoings, a diary will suffice.
                      The bigger problem you may have is with the jobcenter, because you are doing work when claiming that you are physicaly unable.
                      I do hear that in certain circumstances this is alowed but they must be informed, I would go talk to them, they well may look on the venture as a way back into work for you, who knows there may well be a grant available
                      Nope - if you are intending to sell, then you need to register as a business. Failure to do so can land you with a fine.

                      At the end of the day, HMRC don't care what it costs to come after you - in the Arctic case, they kept on losing (including in the House of Lords), and at the end of it did not know how much they had spent on the case (running into the millions, though).

                      It costs nothing to register, but the costs of NOT registering can be considerably more. That said, we trade as a Ltd company, which has it's own complexities....
                      It's never too late to gyrate!

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                      • #12
                        Originally posted by Aviya Glass View Post

                        The taxman knows about the 'loophole' of selling on Ebay and personally I would advise you to sign up as a business than get caught and have to explain yourself.
                        No loophole..

                        Quote
                        "As long as you are not buying goods with the intention of selling them at a profit, you are not regarded as a trader," it says. "This means you do not have to notify us and declare the income on your tax return."
                        Its all about intent.. Clearing out the attic is not intent vs buying something / making something to sell = intent.

                        Simple as that.
                        .


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                        • #13
                          Originally posted by 0103media View Post
                          Its all about intent.. Clearing out the attic is not intent vs buying something / making something to sell = intent.

                          Simple as that.
                          Bingo.

                          That said - if memory serves, if you are "clearing out the attic" and the stuff in it takes you over your capital gains threshold, I think it is declarable on a personal tax return?

                          In any case - if you are selling things which you have bought or made with the intention of making a profit (whether you are profitable or not is largely irrelevant at this level) - then you need to register within three months of commencement.

                          Commencement is arguable - as we sell services more than products, we interpreted this as "within three months of forming the company" - you may reasonably be able to interpret it as "within three months of advertising the first item for sale".

                          There are no negative connotations involved. The worst thing is that you will have to fill in a tax return - the first one is a bit daunting if you are not accustomed to such things - but there is plenty of good help out there on the web, and I'm sure everyone here can give advice from their own experiences too.

                          The good thing is that this will all encourage you to keep decent records - which will ultimately be to your benefit!
                          --Matt

                          Web Development
                          Beads, Charms & Findings - Jersey Craft Shop

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                          • #14
                            Could I be really rude? I'm disabled too. Why are you only claiming DLA? You would get more money claiming Incapacity benefit and I don't think it effects the DLA part (I get the Motability part and it doesn't effect that)

                            I think you should go and have a chat with a money person at the Citizens Advice Bureau AND ask them about everything. They're really good and totally impartial.

                            Debbie
                            Debbie
                            http://www.facebook.com/home.php?#!/...?id=1262375772

                            http://www.folksy.com/shops/purplemac

                            http://purplemac.misi.co.uk/

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