Accounting Help

[apolloa]

Hi, I am planning on setting myself up as a Limited company to sell new items on eBay. It's just to earn an extra income to begin with.

Now as I understand I will need an accountant or similar for tax returns etc, sadly I am in the UK so HMRC will no doubt be watching like a hawk so it's a necessity in my eyes.

But should I pay for the local accountancy firm in the high street, or one of these online systems with apps etc? And if so which is the best one of the latter?

[myriad*seller]

Why not start as a sole trader and do your accounts yourself?

I do, it's very simple. 

You can get free accounting software if you open a free sole trader business bank account with Mettle and it is very user friendly. 

[game_raid]

There is no reason to become a LTD Company if you don't need to, sellers only really change for tax reasons.

Becoming a LTD company will bring high accountancy fees also, we pay £240 a month, some may pay more or less but £200 is about the average.

As myriad*seller says it is pretty simple to do it yourself as a sole trader.

[papso22]

Just to be clear, despite Ebay's somewhat ambiguous wording, you do not need a limited company to be a business seller on ebay.

[magpiecorner1]

There are a number of advantages to becoming a limited company.   You do have to submit accounts but the complexity of those accounts, and therefore the costs, vary hugely 

Sole trader accounts can be so simple as to not require an accountant.  HMRC gives a huge amount of help.

Have a chat with your local Business Gateway and book a session with a local accountant.  Both will give you the information to suit your circumstances.

[myriad*seller]

I visited a nice (honest) accountant recently as I stupidly set up a Ltd for my (service-based) business

Accountant told me politely it was totally unnecessary and is only better for taxation purposes if I am making a Net profit of over about £50,000 (not an exact figure can't remember exactly what it was and it may have changed since the recent budget).

He said it is better to stay Sole Trader as I would not be better off as Ltd until I do reach that threshold. So I shut my Ltd back down again and went back to being ST. 

Also ltd co accounts cost £1300 + VAT whereas if he did my ST books it would be £350 + VAT ( I do them myself as it is very simple with the free software) so I would have to earn £1000 extra just to pay him to file my Tax return (and that is after I had corrected any errors, it doesn't include error correction!!) 

There is no requirement to be Ltd to trade on eBay, it will add to your costs unless you make over £50K net profit per year.

I am, obviously, not an accountant and you should take your own advice as things may have changed. This is just my experience. 

I WILL use his as an accountant in future if needed, due to his honesty! 

[crg_music]

Yeah unless you are turning over huge amounts of money straight away its not worth it and you can always do it later on if need be.

Pretty sure it was a 10 minute phonemail to hmrc and I was self employed although that was 20 odd years ago. When I first started I had a friend who had recently started out her own part time accountancy firm from home to support her uni so would do my tax return for £100 as a 1 off which was great as I didnt have a clue but that gradually crept up as she gained letters after her name with me having to pay monthly to the point it was more like £500 so I decided to do it myself and it literally took me an hour. I had always kept decent records in 2 spreadsheets so had done all the hard work and putting it into hmrc website was very easy.

[apolloa]

Thanks for the replies, I want to go Limited as I may sell electronics. And this I personally do not want to risk being sued, rather have a company that can be at risk. 
Soul trader has not even entered my mind. And it doesn't take that long to set up a Ltd company. But £200 a month is quite a hit! 

how easy is it to transition from soul trader to Ltd company? And how much risk are you at as a soul trader?

Is there any decent accounting software out there like Quickbooks?

[tascio1]

If you look on ebay, Quickbooks is available from an online seller for a small sum without the regular payments you'd have to pay if you bought direct. I've had two lots in past few years (different computers) & simple to use.

[the-nutwood-collection]

As a sole trader, you can take out liability insurances - you don't have to be a limited company.

[magpiecorner1]

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@apolloa wrote:

Thanks for the replies, I want to go Limited as I may sell electronics. And this I personally do not want to risk being sued, rather have a company that can be at risk. 
Soul trader has not even entered my mind. And it doesn't take that long to set up a Ltd company. But £200 a month is quite a hit! 

how easy is it to transition from soul trader to Ltd company? And how much risk are you at as a soul trader?

Is there any decent accounting software out there like Quickbooks?

---

The other option with liability concerns would be public and product liability.  NUM insurance is used to give done great advice for these insurances.  Accountants can advise on the best option for you.

[therenewalworkshopltd]

You really don't need to go Ltd, unless there are outstanding reasons to do so.

But I cannot imagine that as a startup, you will have any of these other reasons.

Speak to an accountant.  First chat is usually free and they will steer you in the right direction.

As regards liability, whether sole trader or ltd, you need to have insurance in place.  

You can't just go ltd and expect that to cover you, as it won't.

There is lots of accounts packages out there that will do exactly what you need.

Everything from a spreadsheet, to most complicated packages you can imagine.

I would however recommend that you look at something like Xero and use Link My books (or other packages), to automate the process.  It will save you so much time on your accounts, you won't believe it.

[tribalgiftsuk]

I concur with the other replies you have received, you don't need to go limited to start with. Start as a sole trader and get Limited Liability insurance for online sellers. Do you own accounts to start with as long as you keep good records of everything spent and sold it is easy enough to do for HMRC.

Once you've built up a good sellers reputation and are selling a good volume per year you can then set up as limited. In this current climate it is not so easy trading online so let it build up then you can look at accountants once you have a decent income.

[technthread]

I’m guessing the OP may be concerned about copyright issues rather than liability insurance. I could be barking up the wrong tree but if importing electricals from abroad maybe the ltd co would offer more protection.