DO i need to be a business?

[gilly]

Hi,

Can I ask all you out there who sell their stuff....

do you have to be a business?.....tell the inland revenue or VAT?...
I usually make stuff for people but only charge the cost of what I buy so I don't make a profit is this OK or do I need to register as a business.

also I'd like to start making a profit but again don't know the legal implications

thanks in advance for all the god advice i'm going to receive

gilly

[beadsbydesign]

I can not comment on your individual situation, however, the rules for registeringas employed or self employed are:
you must register if you recieve funds or reward (that can include vouchers, shopping etc) in receipt for services or goods.
The inland revenue are a helpful bunch and you can ring your local office to discuss your requirements.
Ignorance of the law is not excepted as an excuse, so it's always best to get the facts right!

[Seahorse]

Im kind of in the same situation.
Im making things to sell in the hopefully near future.
I would suggest if you want to make a profit on a regular basis(as BBD says)you would need to register.
You have 3 months to register.There is a form on the Inland Revenue site that you have to fill in(it looks quite easy, even I understand most of it).
The only thing is that they will want a third of your profits.
You can VAT register but you dont have to unless you have an annual turnover of around 60K.

[wabbit]

The only thing is that they will want a third of your profits.

No they only tax you if your turnover (ie all the money you get in regardless of how much goes out - not your profit) is above approx £15,000 or something like that.

I have been registered as a sole trader running my own business for three year and have yet to pay them a penny ( in fact they give me back the tax I get charged by my bank every year)

You have to register with the Inland Revenue, even if you make no profit you have to prove you make no profit IYSWIM They really are very helpful if you are nice to them they will be nice to you.

I did a couple of self assesment courses with them which were very helpfulas well.

[0103media]

No they only tax you if your turnover (ie all the money you get in regardless of how much goes out - not your profit) is above approx £15,000 or something like that.

nop Its not 15k + ..

Everyone is different .. e.g. if you self employeed and have a full time jobs then its your total income ...

For the tax year 2006/07 you can earn £5035 before you have to pay tax. after that you can earn £2090 and be charged tax at only 10%. earnings after this are taxed at 22% up to £32400. Earnings over and above £32400 are taxed at 40%.

[0103media]

Almost forgot national insurance too.. add another 11%

Which can bring you up to 51% of your turn over minus deductions

[nattynetty]

Almost forgot national insurance too.. add another 11%

If you're not expecting to be earning much (think it's about £5k) you can apply for NI exemption, think the form might be with all the other bits from the IR but not sure. If you're just starting out well worth applying for this.

Also as Wabbit says you don't always end up paying them...if you don't make much you could end up getting a refund always a good thing.

When you add up everything you've spent on materials and equipment you'll be suprised how it reduces your profit...................Seahorse will be owed thousands by the IR at the rate she's buying at the mo

[wabbit]

nop Its not 15k + ..

Everyone is different .. e.g. if you self employeed and have a full time jobs then its your total income ...

Thank you I stand corrected, serves me right for talking off the top of my head

Wish I was paying tax tho as it would mean I was earning more!

[Seahorse]

I am sooooooooooooooooooooooo confused!!!

[swirlyarts]

Me too and I have my own business!!!! Luckily we have a very nice accountant who does it - and I have a hubby who understands it too!

[wabbit]

I am sooooooooooooooooooooooo confused!!!

If you sell anything then yes you do need to register with the Inland Revenue, is that better?