Setting up an Online Shop - The Legalites

[Windspirit]

Hiya I'm sorry you guys have probably answered this question over 100 times before but i was wondering if you could help me

I'm looking into setting up an online shop and i'm just wondering what are the legalites i keep researching but i just get more and more confused.

if i register as a sole trader i have to say that i'm self-employed... but thats not strictly true as i'm still looking for a full time job and will be possibly studying part time as of january.... so i'm all a bit confused how do you deal with bank accounts inland revenues taxes copyrights legalites etc?

also are there any rules and reulations i must comply to re: refunds etc specific to online shops?

the other thing is, as I'm looking for a job i'm currently applying for job seekers allowance, if i register as a sole trader surley that will be stopped, and as my company might not be making a lot of money straight away, would i still be eligible for any assiatnace with my rent? as my online business might say be making like £10 a month (hopefully not but you never know)

also any advice of keeping my own accounts as i cant exaclty afford an accountant at the moment would be great, and do you advise is set up a seperate account in the companys name or get a dedicated business account

im sorry i'm over flowing with 1001 questions, but any help would be great!

many thanks

--Emma

[Morgan]

Hi Windspirit, sorry Emma, and welcome! You can be a sole trader and therefore self employed as well as being an employee for someone else so that isn't a contridiction.

I personally would get an accountant. When you register with IR as self employed they will probably offer a free course you can go on which is worth doing but I still got an accountant. They should pay for themselves in the long run. For a small business you should only be looking at about £10ish a month.

Hope that helps a bit!

Morgan

[Windspirit]

really as little as £10 a month? thats not too bad! perhaps if i call up the IR and discuss it with them the could reccommend a course in my area?

the thing i'm most worried about as i'm jobless atm (though not for the want of trying!) that as soon as i register as a sole trader (even though my income would be negligible) all benefits would be stopped.

[Morgan]

Yeah once I registered with IR they offered for me to go on their self employed course that they run. It was good to do very informative but like I say I went ahead and got an accountant anyway. More for my peace of mind more than anything else.

I don't know about the benefits sorry.

[kulture]

Regarding rules and regulations, I would say that you need to be aware of the sales of goods act and the distance selling regulations. I am assuming here that you would be selling to consumers.

The sales of goods act tells you what you as a merchant have to do if anything you sell is not fit for purpose (broken, not as described, etc).

The distance selling regulation applies to most things sold by mail order, internet, phone ordering. Basically it gives the customer the right to cancel an order up to 7 days AFTER delivery for any reason and send them back for a full refund.

It would be well worth looking into these things as the terms and conditions of sale on your web site must meantion the distance selling regulations otherwise the customer gets even longer to keep the goods before loosing the right to cancel.

[emerchant]

Interesting article here that might be of use:
http://www.easywebstore.co.uk/legal-requirements-for-selling-online

[norwichchris]

hi,
I am doing a dissertation on PayPal for city college Norwich the report is on the growth of online fraud for the service.

would it be possible for you to fill in a short questionnaire about paypal. The questionnaire itself is totally annonymous and is hosted by kwiksurvey no personal information is held.

Please see below for the linkL:
http://www.kwiksurveys.com/online-survey.php?surveyID=KKLJG_3eba4661

Many thanks chris

[fourblankwalls]

Hi there,

I set up my own business many years ago and faced some of the same questions then.

You don't actually have to register as being self employed for the first three months of trading. Trading means taking money in.

There isn't any legal obligations really if you are going to work for yourself and not employ other people etc...

I would suggest that you fully test the water with your ideas first.

Don't ask friends and family. Come onto a board like this and ask business owners what they think first. Also you can be a bit naughtly and call your competion to see how they do it.

You won't have to pay VAT for quite a long time i suspect as long as you don't reach the threshold in terms of money that you take in over 12 months. I think it is about 70k at the moment. Most people don't reach that for some time. Don't worry about that for now.

All you need to do is check your takings (total money coming in) every couple of months and make sure you are not over that amount for the last 12 months from that date.

When you do think you will reach that or have reached that you can register online at HMRC website.

With VAT you charge the customer or client that amount on top of your standard rate. You also get charged VAT from your suppliers. You take one amount away from the other and pay the VAT man the difference. This money can easily be put asside each month. But as i said above, you don't really have to worry about that for now.

A few things you will have to think about.

Premises, can you work from home to save on premise costs. Business rates are crippling.

If you do decide to work from home then you can simply allocate a small space that you declare to the business rate officials as your working space but i doubt many people actually do tell.

Insurance

If you are dealing with other peoples property or interacting with other people you should have some sort of insurance to cover you for damage and other liabilities.

Marketing

Where are your customers, where are they buying and how are you going to compete?

Most of the above can wait until you have been going for a while unless you are dealing with other peoples propery etc where you will need insurance.

I say, if you have a good idea and you have exhausted your own research then jump in and see how it goes. Most towns have great business advice centres called Business link, that can help you with all the information you need for free. Google them under business link and then your area.