Selling stuff online. I'm scared.?
Been selling items for just less than a year.
Using PayPal
Haven't really been accounting incomings/outgoings properly, just know that I'm making a profit.
I want to give some of the profit to charity.
Please help I don't know where to start. I'm scared of the taxman, will he arrest me? :(
Answers:
First, if you have been trading for less than a year, all is not lost. Are you buying things to sell on - in that case this is a business and you will need to register with HMRC> You should have done it within 3 mths of starting, but if you contact them before they find you, then that will be in your favour. You will need to put some records together, probably using your Paypal account and bank statements. Might be worth asking an accountant to help on a one off basis and then keep proper records from now on.
You won't get put in prison - L Piggott only got put away because he was arrogant and thought that just declaring £10k a year was enough.
V nice of you give some of the profit to charity, but this is not tax deductable.
EDIT: Paypal fees are nothing to do with tax, but they are tax deductable.
Children's clothes are VAT-free in the UK, not free of income tax if you make a profit selling them!
You should sell on SumoBid.com. Its FREE to sell.
The tax man does not arrest people ! The worst that can happen is you will receive a tax bill - which you can dispute if it`s unfair. Get rid of paypal if you don`t want to pay tax. I don`t agree that people selling stuff on ebay should pay tax - unless it`s their full time and only income of course and they are making a lot of money - from new goods - not their own goods they are selling on. My arguement is - you paid tax when you bought the item, so why should you pay it again when you sell it on ? I know yours are new goods so that`s different. Don`t forget though - kid`s clothes tax free in uk......
Don`t worry about the tax man - you haven`t crossed him yet. They don`t run around locking people up you know. My son owed some tax, and we disputed it for 2 years as it was way too much. In the end they had to wipe the slate clean.
Get this straight. You DO need to pay tax, and the sooner you get in touch with the taxman about how you are going to do this the better. Read the first contributor again.
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