Tax and small business

[striving-young]

I am thinking of earning extra money dropshipping on ebay.

Tax is confusing me though, I work part time and live with someone who pays full tax though I don't pay rent, the last thing I want to do is complicate issues of the person who I live with. I will most likely stay below the threshold even if I made any money so I'm unsure of whether to go through the hassle of stating my intentions.

If I was earning over the threshold then that is another issue as I would then state my intention plus maybe hire an accountant though I don't want to bog myself or my friend down with complications over tax when I make little or no money and am more testing waters.

I've had experience with tax authorities getting it wrong with family which is another thing that scares me.

I can't afford accountant at the moment.

What do you guys suggest?

 

[FoxAccountancyServices]

Is this person a friend or a partner? Are they in receipt of any benefits?

 

[striving-young]

The person is a friend and recieves child benefit I think.

 

[FoxAccountancyServices]

OK. And is there a reason you think your income will affect your friend? How do you think it will affect them?

 

[striving-young]

I have never dealt with tax before. Someone suggested all I need to do is register as a sole trader with hmrc.

 

[striving-young]

I just thought it might lead to him having to pay more or complications which would annoy him though I know he pays full tax.

 

[FoxAccountancyServices]

Well, if you pay him rent, then he should already be declaring it... and whether he pays tax on that depends on a few things, which I am not going to go into - that's for him to worry about, not you. If you dont pay rent, then his situation is not affected, until you start paying rent.

If you were working or earning money from self employment that should not change his tax situation. It would only change yours. And if you are not earning above your personal allowance, then you still pay nothing. However, you do have to declare your earnings regardless of whether you end up paying tax or not. And if you are on benefits you would have to see how your work would affect your entitlements. There are some cases where you can earn a small amount without losing benefit, and there are some cases where you can apply for working tax credit when you are on low income. Citizens Advice are the best people to talk to in this case