Tradebox - Ebay Accounting Package

 

We all know of the global phenomenon of the auction site ebay. In the past few years their has been an estimated 140 million users who buy and sell on this global network from both home and business premises. Everything from apple ipod nanos to wedding dressers are sold on the site today.

The popularity of the site has made the environment ideal for the budding entrepreneur who is looking for his next business opportunity or just to simply make some extra cash from home. The ability to have millions of potential customers within a click of a mouse has massive appeal, and with the ability to sell using methods such as paypal make the process of taking payment by credit card even a simple process.

problems on ebay arise when the level of sales becomes such that traders require some basic knowledge in order to keep any finances in recorded correctly. If the traders sell only knick knacks as to speak and do not use ebay to subsidide their income then this is not an issue.

But in all cases a record of the sales should be kept in case the tax man comes calling regarding larger amounts of revenue from ebay sales.

The thing that must be remembered is when does a hobby become a business? and when should I contact the inland revenue? What information would they require and how do I go about minimising the risk of any approach from the tax man? What bookkeeping software should i use?

Possible Sage Software or even Ebay Software?

Let’s outline a checklist for people starting an eBay business or frequently sell ebay goods.

Things that should be carried out when starting an eBay business:

1. Set up any wholesaler account for the product you wish to sell. try and set up a credit account with the wholesaler. You can the buy and sell before paying the wholesaler accounts 30 days later, after you ahve been paid for your ebay sales. This reduces your initial payment layout.

2. Create an eBay account and set yourself up with their free listing and seller tools.

3. Open a paypal account for credit card payments.

4. Contact the inland revenue Within three months of you starting a business. Start off as either a limited company or becoming a self employed.

5. Work out any deductions that you can use to reduce against the taxes to pay (laptops etc)

6. Ensure your accounting records are in good order and keep track of everything that is bought and sold. We will cover some of this in future blog posts and give details of any bookkeeping software or free utilities for book keeping that we create for use within ebay.

Now here are some things you should NOT do:

1. Ensure that you keep your ebay business seperate from your personal spending. use 2 different accounts.

2. make sure that you do not assume ebay will inform the inland revenue of any taxes. This is your responsibility.

3. Don’t ignore rules or any authenticity rules. If you plan to sell goods you have to ensure they comply with safety standard and are not fake.

4. Don’t bury your head in the sand. If you income over the year has increased then you have to inform the inland revenue of the monies received and agree with them the amount of tax to pay. Also you must be aware of the VAT thresholds and how to register of you go above those thresholds.

Well thats all for now and be sure to subscribe to our rss feed to keep upto date on new posts and free software.

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