Starting a business as a middleman seller on a website

[Roozbe]

I moved to the UK about 1.5 years ago on a dependent visa with a work permit for full-time employment. I recently created a business where I purchase game loots from gamers for, say, 100 GBP and then list it as a product to sell (at 105 GBP) on a website called G2G (g2g.com). Then, another gamer searches for my product on G2G and, let's assume, decides to buy it because they need some of that treasure in that game (to unlock/upgrade a hero, for example). I therefore made 5 pounds, but the withdrawal I made from G2G was for 105 pounds.

If I stretch the previous example to a month, I am earning about 450 pounds per month from this work, but the entire transactions total about 5K pounds.

Here are my questions now:

1. Is what I am doing legal? (The website claims that they are paying tax for each product I sell)
2. Who should I inform so that I can make sure that I am not doing something sneakily?
3. I have to register a business account because one of my bank accounts was closed due to a high volume of transactions, but I'm worried that if I do, I'll have to pay tax on a 5,000 transaction. (although it is not what I am earning, I am only earning 450 pounds which is tax-free based on the government (gov.uk) website)
4. I spoke with HMRC once, but they seemed uncertain about my situation and simply registered me as self-employed, telling me to wait until the following tax year. As a result, I have the impression that speaking with them won't be a reliable source of evidence in the future if I ever run into a problem. Am I right?

In short, I want to work this job entirely legally but I also do not want to worry about my visa or residency in the future or have to pay tax (or any other side expenditures) for money I am not making. (I do not mind setting up a business or whatever as long as I am not paying for something that I should not)

 

[japancool]

You pay tax on the profit you make, which you declare on your tax return. That's why you keep accounts.

And if you turn over more than £85,000 a year (that's turnover, not profit), you need to register for, and charge VAT.

 

[Roozbe]

You pay tax on the profit you make, which you declare on your tax return. That's why you keep accounts.

And if you turn over more than £85,000 a year (that's turnover, not profit), you need to register for, and charge VAT.

Thank you very much for your help.

Regarding VAT:
I post the product at the price of 105 GBP but a buyer will buy it, say, 126 GBP (the website only pays me the original 105 GBP) so they are paying VAT to the website in fact.
How can I put VAT in place for my case? how does this VAT apply to me? who should I charge for VAT since the customer is already charged by the website?

 

[ethical PR]

As you are allowed to work full time on a depdant's visa why don't you get a job in line with your skills and qualifications rather than messing about with this sort of model.

You need to talk to the company you are buying from about VAT issues. And get an accountant to talk your through your tax liabilities - you need to set aside profits that you will pay tax on.

You need to check your visa conditions to see if you are allowed to have your own business.

 

[Roozbe]

As you are allowed to work full time on a depdant's visa why don't you get a job in line with your skills and qualifications rather than messing about with this sort of model.

You need to talk to the company you are buying from about VAT issues. And get an accountant to talk your through your tax liabilities - you need to set aside profits that you will pay tax on.

You need to check your visa conditions to see if you are allowed to have your own business.

I wish you would have simply answered my question rather than being nosy

 

[Paul Kelly ICHYB]

You are buying (cost) for £100 and selling (sales/turnover) for £105, making £5. What the platform sells for is irrelevant.

Are you paying VAT on the cost of £100?

When your sales/turnover reaches £85k, then start worrying about VAT.

 

[Roozbe]

You are buying (cost) for £100 and selling (sales/turnover) for £105, making £5. What the platform sells for is irrelevant.

Are you paying VAT on the cost of £100?

When your sales/turnover reaches £85k, then start worrying about VAT.

In fact, I post the game loot for 105 pounds but the buyer buys it at the higher price because they pay VAT to the website (which I do not own -> a total third-party website). And I pay the real seller 100 pounds and they are not in UK so they are not subject to VAT. Does that make sense?

 

[japancool]

In fact, I post the game loot for 105 pounds but the buyer buys it at the higher price because they pay VAT to the website (which I do not own -> a total third-party website). And I pay the real seller 100 pounds and they are not in UK so they are not subject to VAT. Does that make sense?

No. If they're not subject to UK VAT, then they should not be charging VAT.

Are you sure the buyers are paying VAT to the website, or is it a commission fee? The difference is important.

 

[Roozbe]

No. If they're not subject to UK VAT, then they should not be charging VAT.

Are you sure the buyers are paying VAT to the website, or is it a commission fee? The difference is important.

The thing is buyers are 99% of the time outside of the UK and all sellers (from which I get the loot) are outside of the UK. So where does VAT come into play exactly?

on the other hand, Doesn't the website have to charge the buyer for VAT if they are a UK customer?