websites and making money

[futured]

Hello fellow UKBF members! I have a question that am not sure of and hoping you all could help out.

I am in the process of setting up a website. However, I am not sure whether you have to be a business to sell online or not? I'm quite sure that the answer to this question is no. But then what about when you start making a profit? Do you have to declare to the government/hmrc that you are making money? There are so many websites that only make thier money from online websites however are not registered businesses, so how does it all work in terms of profitting from the website?

 

[futured]

Anyone? This is something that has intrigued me for some time and would be great to know as the website is almost ready. Thanks.

 

[rajukk00]

I have some business product which I want to promote this. will you like to suggest me?
theme party in delhi

 

[businessfunding]

The minuter you start trading you must declare yourself as self-employed to HMRC.

The letter of the rule is that you are trading as soon as you promote your products or services, though there seems to be general acceptance that it is when you deliver or accept payment (the first of)

 

[Stugull]

Hi, Its great to see you are venturing into the realm of an on-line entrepreneur! Unfortunately yes, you will have to pay the relevant taxes on profits/incomes to yourself or staff. And there are many ways in which you can do this - I would recommend the HMRC website as its very good, if a touch confusing. The way we (Fitness Saver) have done it is set up a limited company with investment shareholding to get the business started, but this was because there are 4 founding directors! You may not have to do this if your set up is less complicated. HMRC just want to know you have accounted for income and paid the relevant tax. Self assessment may be the route for you, depending on how complicated your set up is. There are a few rules that you need to follow by way of timings of declarations etc, but they are all on the HMRC website. Search the site for 'Sole trader' which may be relevant for you?

 

[futured]

Thank you all for the helpful replies! Just to be clear then, even if I am not registered as a limited company or even a sole trader I must declare my earnings to HMRC? How can this be enforced though, with the vast amount of websites out there? That's what doesn't make sense to me.

 

[Maxwell83]

Thank you all for the helpful replies! Just to be clear then, even if I am not registered as a limited company or even a sole trader I must declare my earnings to HMRC? How can this be enforced though, with the vast amount of websites out there? That's what doesn't make sense to me.

If you run/own a website that is bringing you income, then you are self employed as far as HMRC is concerned. (Unless you are a ltd co or some other type of recognised entity but you have said that you are not)

So yes the law says you must register as self employed, declare your earnings and you must pay tax on that income.

Lots of people don't do that - it does't make it any less illegal. Of course HMRC cannot catch them all, but do you want to take the chance that you will be the one guy in 1000 that gets caught? Thats your decision.

 

[trevord92]

As others have said, as soon as you start trading then you need to inform HMRC.

Sites such as eBay report details of traders to them on a regular basis and there are plenty of other ways they can find out that you're trading. Better to keep on the straight and narrow and be able to sleep at night

Keep good records - at least a spreadsheet - so that you know income and expenditure.

 

[raineshoe]

Same as all the others re registering with HMRC.

You don't have to be a limited company to sell online, but I'm sure you'd need to be seen to be a business to have any credability. I think if you are going to do it you should do it properly and not play at it which damages legitimate businesses out there.

 

[ScotComp]

Thank you all for the helpful replies! Just to be clear then, even if I am not registered as a limited company or even a sole trader I must declare my earnings to HMRC? How can this be enforced though, with the vast amount of websites out there? That's what doesn't make sense to me.

Loads of ways, they're extremely clever these days. I was speaking to an accountant recently about it and the ways he was telling me were unreal.

They're doing a huge campaign at the moment to try and find as many online sellers as possible that aren't paying their taxes - http://www.taxassist.co.uk/hmrc-target-online-traders.php