Newbie Question - Ebay and HMRC Registration?

[flow]

Hi Folks, I was hoping to get some advice on tax registration.

My wife and I are both employed full time.
A month ago we opened an Ebay shop which we both work on together. Obviously we are required to register for tax - which presumably means one of us has to register as a sole trader.

The thing is if the shop takes off my wife will switch to working part-time in order to concentrate on ebay (it's easier for her than me). So I guess from a tax point of view it would be more efficient for her to register as a sole trader. However all the invoices and in-fact the ebay account are in my name?

Does this actually matter - is the tax office bothered about the name on the invoices as long as they get their cut?

Any advice gratefully received!

Thanks!

[crossdaz]

However all the invoices and in-fact the ebay account are in my name?

Does this actually matter - is the tax office bothered about the name on the invoices as long as they get their cut?



The likelihood of HMRC ever seeing these invoices is slim - but, and it's a big but - what if they do?
You may as well put things on even footing now - rather than trying to do it two years time with all manner of complications?

[Wild Goose]

What's gone has gone, but you could change the name on future invoices to that of your wife, but still keep the e-bay account in your name.

Make sure you register your wife as self employed within 90 days of commencement of trade - she'll be fined otherwise.
http://www.hmrc.gov.uk/selfemployed/iwtregister-as-self-employed.htm

tip: think about picking 30 April as her trading year-end (rather than 31st March or 5th April) if you want her to be taxed largely on the previous year's profits from Year 2 onwards.

[Williams lester]

tip: think about picking 30 April as her trading year-end (rather than 31st March or 5th April) if you want her to be taxed largely on the previous year's profits from Year 2 onwards.

If you are even thinking of doing this, then get the advice of an accountant (most will give a free initial meeting). The benefit in starting out can be massive....but it could leave you with a large tax bill when the business ceases.

[Williams lester]

Hi Folks, I was hoping to get some advice on tax registration.

My wife and I are both employed full time.
A month ago we opened an Ebay shop which we both work on together. Obviously we are required to register for tax - which presumably means one of us has to register as a sole trader.

The thing is if the shop takes off my wife will switch to working part-time in order to concentrate on ebay (it's easier for her than me). So I guess from a tax point of view it would be more efficient for her to register as a sole trader. However all the invoices and in-fact the ebay account are in my name?

Does this actually matter - is the tax office bothered about the name on the invoices as long as they get their cut?

Any advice gratefully received!

Thanks!

Why not set it up as a partnership?

[MyAccountantOnline]

Hi Folks, I was hoping to get some advice on tax registration.

My wife and I are both employed full time.
A month ago we opened an Ebay shop which we both work on together. Obviously we are required to register for tax - which presumably means one of us has to register as a sole trader.

The thing is if the shop takes off my wife will switch to working part-time in order to concentrate on ebay (it's easier for her than me). So I guess from a tax point of view it would be more efficient for her to register as a sole trader. However all the invoices and in-fact the ebay account are in my name?

Does this actually matter - is the tax office bothered about the name on the invoices as long as they get their cut?

Any advice gratefully received!

Thanks!

As you have been trading as a partnership you will need to register as a partnership with HM Revenue & Customs.

You should issue invoices in the correct business name.

Bear in mind you dont have to spilt profits 50:50 - you can look at the best split for tax purposes.

Moving forward once the business is up and running it may be that you change the structure to a sole trade run by your wife, or perhaps a limited company depending on the level of profits and your other income etc.

Good luck with the business.

[Wild Goose]

If you are even thinking of doing this, then get the advice of an accountant .

Hello pardon I am an accountant.


(most will give a free initial meeting).

Urggh the why and wherefore of selecting an accounting date would make a v. dull topic for a first date.



The benefit in starting out can be massive....but it could leave you with a large tax bill when the business ceases.

I prefer to think of it as a timing advantage. Pay tax later rather than sooner. Shouldn't cost the trader any more though.

[Williams lester]

Hello pardon I am an accountant.


Urggh the why and wherefore of selecting an accounting date would make a v. dull topic for a first date.




I prefer to think of it as a timing advantage. Pay tax later rather than sooner. Shouldn't cost the trader any more though.

Whilst I am aware you are an accountant, I am suggesting the OP takes advice from a face to face meeting with an accountant, the topic is far too complex for most non-accountants to grasp without a detailed explanation.

The why and wherefore of selecting the accounting period end date may be dull but can be essential to establishing and maintaining a sensible tax bill for the client.

Whilst it may be a timing advantage, how many clients would remember the tax saving you made for them in years 1 and 2 at some indeterminate point in the future.

I stand by my advice - to go see an accountant, for a face to face meeting and to discuss the implications of different year end dates (amongst other things!).

[Wild Goose]

As you have been trading as a partnership you will need to register as a partnership with HM Revenue & Customs.


Hi Nicola, why a partnership? If you're bothered by the invoices having been issued in "his" name then at a push why couldn't she be Mrs E Bayer trading as Mr E Bayer so far as the invoices already produced are concerned. Same way as I could set up... oh, I dunno a Carrot Merchants... and call the business Nicola J****. That's Mr W Goose trading as Nicola J****, carrot merchant extraordinaire :cool:


Nothing wrong with Mrs E Bayer having banked takings in "his" account; Mrs Goose does that regularly to Yours Truly's hard-earned. :mad:

[Wild Goose]

Whilst I am aware you are an accountant, I am suggesting the OP takes advice from a face to face meeting with an accountant, the topic is far too complex for most non-accountants to grasp without a detailed explanation.!)

Rhubarb! I'll let you in on a secret - most people have a 30 second attention span. They aren't really listening to the other twenty nine and a half minutes of your detailed explanation.;)


The why and wherefore of selecting the accounting period end date may be dull but can be essential to establishing and maintaining a sensible tax bill for the client..!)

Agreed, but it's hardly rocket science though. People aren't as slow as you might think to grasp things.


Whilst it may be a timing advantage, how many clients would remember the tax saving you made for them in years 1 and 2 at some indeterminate point in the future.


Blimey, that's a "my glass is half empty" view. So it's not worth saving clients' tax because they'll fail to remember it later? :eek:


I stand by my advice - to go see an accountant, for a face to face meeting and to discuss the implications of different year end dates (amongst other things!).

Oh, alright then. Face to face meeting it is for a full (and free?) discussion on year-end dates. Hard cheese on all those running online practices! :rolleyes:

[MyAccountantOnline]

Hi Nicola, why a partnership?

Because the OP stated ''A month ago we opened an Ebay shop which we both work on together'' Sounds a lot like a partnership to me:)

[Wild Goose]

Ahha, I see it now Nicola. That doesn't sit all that comfortably with:


The thing is if the shop takes off my wife will switch to working part-time in order to concentrate on ebay. So I guess from a tax point of view it would be more efficient for her to register as a sole trader.

I suppose as an alternative to a partnership it could always be "her" business with "his" working together with her as purely a domestic arrangement, or even as her employee.

[MyAccountantOnline]

Ahha, I see it now Nicola. That doesn't sit all that comfortably with:



I suppose as an alternative to a partnership it could always be "her" business with "his" working together with her as purely a domestic arrangement, or even as her employee.

We probably need clarifcation from the OP but my interpretation is that they are currently trading as a partnership and intend to reconsider if it takes off, and yes at that point their are lots of possibilities.

[flow]

I like to thank everyone for their helpful replies - certainly plenty of food for thought!
This is something we started doing as a hobby basically, only to find we could actually turn it into a business almost accidentally. As a result I had paid absolutely no attention to the tax implications - looks like I have some research to do!

Thanks again :)

[MyAccountantOnline]

I like to thank everyone for their helpful replies - certainly plenty of food for thought!
This is something we started doing as a hobby basically, only to find we could actually turn it into a business almost accidentally. As a result I had paid absolutely no attention to the tax implications - looks like I have some research to do!

Thanks again :)

Its surprising how many businesses do start in this way:) Very best of luck with it.

If you arent going to use an accountant HM Revenue & Customs website can be quite helpful.