Find solution
How to pay on eBay?

How much tax do I have to pay on additional income through eBay?

  • I work full time, and receive a regular wage under 40k. I pay tax and NI on the income I receive from this job. Recently, I have started trading on eBay. I know I am trading as per the HMRC, as I am buying goods from wholesalers, to sell on eBay, and I realise that I should register as a trader with HMRC. At the moment, I am making very little profit (I am pretty much selling for the total costs that I have to pay (purchasing, packaging and posting). This is just to get my feedback scores higher, and to 'test the water'. If I do make any profit, it is as little as about £10 per week at the moment- I know its not much, but I intend to buy more stock in larger quantities shortly, in order to make a better profit. I understand that I do not need to register for VAT, as I am turning over less than the 60k through this business. However, what additional Income Tax/NI will I have to pay- do I just pay additional tax on any profit I make from this eBay trading, or do I have to pay a percentage for every sale I make? I am currently making about 14 transactions every week with the sale price ranging from £1.50-£5. I am keeping a record of all sales, and any goods I buy. Thanks

  • Answer:

    As all your tax 'allowance' will be used up through the PAYE on your real job, you will have to pay 20% tax on *profit*. Register now with HMRC and after April they will send you a tax return. You then have to complete that by the end of October. You don't have to actually pay the tax until the following April. Once you start having a decent turnover, it will probably be worth you employing an accountant - mine costs £20 a month, his fees are allowable against profit and he saves me more than I pay him. While you pay NI through your day job, you don't need to worry about that.

Sparky at Yahoo! Answers Visit the source

Was this solution helpful to you?

Other answers

Register for Self Assessment now please - bear in mind e-bay will report your trading to HMRC anyway. You will be paying 20% income tax on the profit but you could easily get into the 40% band. Full records - a separate business bank account is a requirement now, submit tax returns, good luck.

Petrusclavus

OK, If you are trading from home then you can include some home costs which would reduce your profit thus making zero profit and no tax

Jim

Remember when you ship items you sell on Ebay that has a final value/final bid of $100 (US) (75.093 EUR) or more, you must require a signature and add insurance.

Chris

Related Q & A:

Just Added Q & A:

Find solution

For every problem there is a solution! Proved by Solucija.

  • Got an issue and looking for advice?

  • Ask Solucija to search every corner of the Web for help.

  • Get workable solutions and helpful tips in a moment.

Just ask Solucija about an issue you face and immediately get a list of ready solutions, answers and tips from other Internet users. We always provide the most suitable and complete answer to your question at the top, along with a few good alternatives below.