Like most people, you may well have dabbled in the online selling world of eBay. If so, it could be that you do need an accountant. Why? It’s because any kind of extra or ‘side’ business still needs to pay taxes.
This isn’t the case if you only sell the odd old DVD or piece of clothing because you need to clear some space and want some pocket money; but if you regularly sell items on the auction site and make a profit doing so, and if that money is providing you with a living (no matter how small), then it is classed as a businesses, and businesses pay tax.
The same is true of any kind of selling site. If you create handmade jewellery and post it on Etsy for sale, you could be liable to pay tax on the money you make. If you use Lulu or Createspace to self-publish a novel, the government is entitled to their share of the profits. And so on.
It can be tricky to work out the difference between personal selling and business selling, but the main differences are:
You may feel that selling items on eBay is a hobby that brings in a little spare cash, but if the answers to the above questions determine that you are running a business then you will need to be registered to sell tax. This is the case even if you are registered as a private seller and not a business seller on the selling site.
Everyone has a personal tax free allowance of £10,000 which means that no tax is payable on the first £10,000 you make. If you have a full time job, however, that £10,000 will already have been used up, which means there is no allowance left for the second business to take.
If you are unsure about whether you should register for tax payments for your online selling, please contact us – we are experts in exactly this type of case and we will be able to advise you.