Deciding whether to become a business seller or stop selling altogether ...

[jc-2002]

I'm looking for a bit of insight into what would be involved in changing my seller account from private to business, especially with ref to self assessment paperwork etc.

I've looked though the financial statements which ebay produce monthly for me and I'm trying to scope out what would be involved paperwork-wise in becoming a sole trader (I believe that's the correct phrase!). I think I would need to fill in an HMRC SA100 and an SA103 short form as I would be below the VAT threshold.

My monthly financial statements have an entry called "payouts". This looks to be the sum total of payments made by ebay to me for the month. The payouts appear to have already taken care of any seller fees and refunds etc.

Is it as simple as adding up all these payouts on the 12 statements covering the tax year and that would be what I would put in the "turnover" section of the SA103?

That seems way to simple, but maybe I'm overthinking it.

Any advice apprecited.

Mark.

[rainbowtrax]

No, your turnover is everything paid by the buyer, that is sale price + postage the buyer paid. Then all your costs are expenses; ebay fees, item cost (or cost of materials if you make items), postage and packaging costs you incur etc. Your turnover minus your expenses is your profit. Profit is what HMRC use to calculate your tax liability.

As you look like you're already trading then the following applies. You have a £1,000 turnover annual trading allowance before you have to declare your earnings to HMRC. Once your turnover (sale price + postage paid by the buyer) exceeds £1,000 for a tax year then you should have been keeping basic records and filling in a self-assessment (even if you make a loss overall).

[papso22]

You might want to have a look at this thread:

https://community.ebay.co.uk/t5/Seller-Central/Business-operating-as-private-sellers/td-p/7441430/pa...

Your self assessment returns will record turnover as your total receipts (item and postage charged), and expenses as costs such as ebay's fees.  They get netted off before you get to profit on which you are then taxed. 

The best place to go for advice on completing self assessment forms is HMRC, you could start here:

https://www.gov.uk/self-assessment-tax-returns

An ebay business account is not a choice, if you meet the conditions it's an ebay requirement and the only way you can meet your legal obligations under consumer law. 

[susapric-68]

You need to add up all the fees ebay charges you plus any cost you have paid out for stock and P&P, that goes in one section. Then you need to fill in total inc for the year in another section and it works out how much profit you have made. If below thresshold if just tells you you owe nothing and would you like to pay voluntary NI. I use Excel to keep track of everything so come April i can fill it all in when having a coffee

[oakley_home_and_gifts]

It looks like you are already trading as a business. If you look on the sales history it will show you your turnover for a year or can select specific periords to check. 

I would recommend speaking to an account as they will give you the best advise. If you have been way over the £1000 threshold for a few years then it may be worth paying those periords as well. 

[floral.lines.supplies]

If you're trading like a business then you should be registered as a business.

Keeping it simple - it's total sales plus postage minus total business bills. You should have a full paper trail like postage receipts, stock receipts, ebay invoices, etc etc.

My books are laid out monthly and completed monthly without fail - each month has a bank statement, all receipts and all invoices/bills. I also do a handwritten breakdown, so when it comes to my self assessment which my accountant does each December, all they have to do is look at what I made or lost that month.

Should anyone be claiming state benefits like UC and you're registering a business, they'll need to be informed as any self employed income may/will be taken off your benefit when you come to fill out the paperwork in your journal each month before they make a payment.

Don't forget you have to register with the HMRC before you submit a self assessment which can take some time and if you do any other paid work you'll need your P60. 

[jc-2002]

Putting aside the requirement to register as a business seller (which I can either do or simply just stop selling on ebay as the discussion title says), it looks like I should be using the monthly transaction report CSV files that ebay generates as the starting point for a self assessment tax return.

I understand what @susapric-68 is saying (I can see the relevant boxes on an SA103s form) and looking at the transaction report CSV file I can see the various columns that would likely give me the figures I would need. It seems I need to keep fees separate from sales even though ebay takes the fees off before payment. 

I'm just trying to scope out where I would get the figures from and what is involved in using those figures to fill out a self assessment tax return.

[the_book_seekers]

You'll have to fill in details of your personal finances - any sources of income like interest on saving accounts, dividends on shares, private or state pensions.

[simplyessential_uk]

in addition to whats said i used Excel in the past with colums for incoming minus outgoings

Look at "pandle" its free accounting software.  Set up categories for outgoings eg post, stock (i break them down to suppliers) stationary, equipment (like storage boxes etc ) and then input incoming (get that off your sales reports on ebay monthly)

Input monthly into pandle (unless you want to input 1 figure at the end of tax year) and then print off report for your self assessment online. 

Doesnt need to be complicated, dont need to do stock takes etc (there are different ways of doing it at year end, which used to confuse me) just basic incoming minus out, HMRC then tell you how much you owe them.  As long as you keep a paper trail (receipts or store downloads) then if youre asked you can produce how you got your end figures.

[nigel_paul_wright7557]

At the end of each month I create a text file of all income and all outgoings.

At the end of the year I total up all income and outgoings and pass them to a accountant.

He then does my self assessment for me for less than £100.

[susapric-68]

Keep a track of everything and like it has been said keep a paper trail. Everyone has their own way of doing it and you will find the fastest and easiest way for you to keep records.

Takes a little bit of extra time but if you don't have an online Business Account with Royal Mail it would be worth setting one up as you get cheaper postage and most postage supplies you can get for free from Royal Mail. Just need to invest in a Shipping Label Printer 4X6 (expence to add in outgoings)to print the labels. I found that makes up for the time lost doing paperwork as i just need to imput weight and then print them all off at once. Can even link you eBay account to you Online business Account so if downloads all the orders and uploads tracking info

[sheba-knows-best]

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@jc-2002 wrote:

Is it as simple as adding up all these payouts on the 12 statements covering the tax year and that would be what I would put in the "turnover" section of the SA103?

That seems way to simple, but maybe I'm overthinking it.

Any advice apprecited.

Mark.

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Hi Mark

Payouts wont work because as Rainbowtrax said that isn't turnover/sales (same thing). Payouts are sales minus ebay fees (and can, in any case, be affected if, at any time, ebay takes money from your bank to coverall a shortfall).

So you need to establish sales/turnover for your self assessement. The good news is that IS as easy as looking at payouts but just in a different place.

Seller hub / Performance tab / select sales / then set your dates...

Using this same area, you can also see:

Your total ebay fees (a cost)

Your quantity of sales. So you can approx your postage costs if you want. (99% of mine go by second class parcel royal mail)

TOP TIP: Use an accountant unless you love keeping up with new accountancy rules. They will save you loads of money by getting legal tax discounts if you use rooms in your house, have to wash any items, use your car etc etc.  Mine is £350 a year as I have fingers in a few pies but it should be cheaper for most. 

[sheba-knows-best]

SECOND TOP TIP: the tax man isn't trying to catch you out. As long as you declare everything to the best of your ability, keep as much of a paper trail as possible without breaking your back, and do everything with diligence and fairness you will be fine. 

[jc-2002]

Hey, thanks for that simple clear explanation! So the 2 figures I would need are the 2 at the top - total sales and selling costs. They look to take care of all the ebay fees and handle any refund amounts etc.

Most of my sales are RM 2nd class letter but occasionally a small pip box (large letter) via RM Tracked 48. I buy all my postage (almost entirely using RM) through ebay. I'm looking to see if there is a way to get a list of label costs apart from the Seller Hub / Orders / Postage Labels and then listing a month at a time - usually across 2 pages.

Thank you.

[jc-2002]

Thanks for the tip. Not sure about the RM business account - don't I have to have a minimum number of letters per day/week/month to qualify? I did have an RM Click & Drop account linked to ebay but I couldn't see how to combine 2 orders that a buyer had placed on the same day on Click & Drop. I can do that easily when buying postage through ebay. 

[sheba-knows-best · Accepted solution]

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@jc-2002 wrote:

Hey, thanks for that simple clear explanation! So the 2 figures I would need are the 2 at the top - total sales and selling costs. They look to take care of all the ebay fees and handle any refund amounts etc.

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Yup - easy peasy! Or at least that's what I've been doing since ebay's move to Managed Payments and no one has flung me in prison and thrown the key away yet.

That's why we all LOVE ebay, it is such a helpful selling partner. 😋   😎

Sorry, everyone, I couldn't stop myself. 

[magpiecorner1]

Hi Sheba, height of laziness, but just closed off my Business Accounts - my trading year  is Jan 1 to Dec 31 2023 - I didn't even bother doing 12 separate months, just total for year!

[*vyolla*]

@jc-2002 

To correctly register as a business seller simply go to your Personal Information in your account and to the right of Account Type, which will be showing as 'Individual'  you'll see an Edit option.

https://accountsettings.ebay.co.uk/profile

This doesn't affect your feedback profile or any current listings, it merely upgrades your account so that you're legally compliant. 

[jow1995]

You have sold over 7.3k items so you are a buisness seller, you will be required to enter you NI in the coming months by Ebay , then your selling history is sent to HMRC. My advice would be get an accountant pretty sharpest.

[susapric-68]

Easy to combine 2 orders. just place both orders on same envelope and then delete one from click and drop.,when you get the tracking number just copy and paste it to ebay order you deleted. on a business account using click and drop it's cheaper plus you can download a statement that shows total postage paid so made record keeping easier. You send more than enough to qualify for an online business account and you just ask them to link it to a click and drop account