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.
.
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..;-)
Tags:
I have recorded all my sales since I started building guitars to sell in 2013 and hope they won't breathe on me too much as I am now unemployed, but yes interesting point.. :-)
Unemployed...earning money on the side? Be careful...getting nailed for that may be more painful than the tax issues. Of course if you register as a sole trader, that's your benefits affected or even out the window...you've got a job...
not claiming anything yet, if I do I will declare my meagre earnings :-)
I could be 'retired' ...?
I've always been self-employed so it's not an issue for me, but take it from me, it can be pretty unpleasant dealing with HMRC and having them in your home and going through your books, even as a routine visit. You do keep annual accounts don't you? If you don't and you are turning any sort of money...you do need to start keeping your paperwork in order. And dealing with them over VAT is truly frightening....they play very hard ball.
To add to the mix, have you got public liability and product liability insurance? You need it if you are trading at outside events or having people visit you in relation to any business trading you are doing.
Of course, if it's just a hobby, then there's no worry, but if you have a trading website and / or a continuous sales presence on eBay, I think that in future HMRC will start taking more of an interest in trying to pry money from people earning money this way. Deep Joy.
thanks for the advice CJ, whatever happens its best if you go to them rather than they find you.... ;-)
Basically sole trader looks just like another term for self employed. I was self employed a few years before my health problems. I did my own taxes, self assessment, kept spreadsheet records etc of students times, dates etc ( I was teaching guitar).
From link, if you register as sole trader, looks like same thing. You will be required to keep records, a note of money in and money out ( expense of building guitar etc, and price sold for). Once your name is officially " on the books", you will be expected to provide records if asked for. Got to ask, is it worth it? Its OK if you have a going concern, regular money etc, and you want to be honest etc. But if you are only making a wee bit cash now and then, might be more hassle than its worth. But if making a a few hundred a week, of course better to declare it, from moral and personal standpoint. Just my penny worth, guys. I'm not a builder or trader, just got the experience of self employment for few years.
Sole trader is just a conventional term - it means trading as an individual, rather than trading as a limited company or partnership, what we'd call being "self employed" - it's the same thing. If you go that route from being on benefit, you've effectively removed yourself from being available for work and the associated financial benefits of being unemployed, and you will be liable for calculating and making your income tax payments and for paying NI contributions. Even Deeper Joy.
I think, like CJ says, they are after trying to prise money from everywhere they can, but laws is laws - is it worth it ? ...will let you know ;-)
my accounts are all up to date and ready though if they come knockin' ..
Have a listen to this weeks Money Box live on BBC radio 4. i think that will answer you questions
David
Hi Everyone
Looking at the various comments and having been in business for over 30 years with my main business i comment as follows
It is better to set up a legitimate business and in your start up you can include all your set up costs providing they are for that business.
Although i do not do much trade in the CBG trade i have a band i play in and i teach people to paint pictures as well as my kitchen business
Regardless of how many businesses you have or indeed none at all you are accountable for all your income regardless
of how little you are making.
Please also remember sites like this will also have inspectors tralling through the forums to check people out
To be fair ( cannot believe im saying this lol) you will get allowances for home use, car use, all your power tools etc are tax deductable but you will also have to declare what you have in stock , how many guitars etc what there saleable value is .
If i earn £100 for a gig from my band as my share i declare that also .
You cannot get away from it , ive even heard of inspectors turning up as a punter to gigs and phoning people to ask how much a guitar is to get an indication as to your earnings .
Also remember they gather their evidence before they call you up it is up to you to " prove " otherwise.
I have had a vat inspection twice and although they are pleasant and helpful they are there to check you .
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