The upcoming e-marketplace campaign could affect people selling goods and services or those who run a business through online trading websites such as e-Bay,  Amazon or other specialist marketplaces.

According to HMRC the “e-marketplace campaign is for people who are trading online to sell goods and services as a trade or as a business but aren’t paying the right amount of tax.”

The e-marketplace campaign starts on 14 March

HMRC have made it clear that this scheme is not targeted at people who occasionally sell their personal items on online trading and auction websites, it is only for those who trade goods online, for example some-one who has an online shop on eBay, Amazon etc.

In their e-marketplace guidelines, which can be found on HMRC’s website, HMRC describe an e-marketplace as “an online market, or online shop, where buyers and sellers trade with each other over the internet.” And that;

“A separate company, a ‘3^rd party’, runs most e-marketplace websites. They let you advertise or auction your goods or services on their website, and usually charge you a fee for this service – either for using their site, the amount you sell your goods or services for, or both.”

There are a number of tests you can take to see if you qualify as a trader:

• Do you regularly sell goods and services online?

• Do you buy products to re-sell online and make a profit?

• Have you registered as a shop with an online auction site?

• Do you sell the same type of items/products?

• Have you borrowed money for the goods you’re selling?

• Do you make items and sell them for more than they cost to make?

• Do you change the things you’re selling to make more profit?

If you answered yes to any of the questions above then you should be registered with HMRC to pay tax.

We advise speaking with a accountant and tax expert before contacting HMRC.

If you would like to discuss this matter further please contact our office for more information.

I’ve sold stuff on ebay. Do I have to pay tax?

Don’t worry if you just sell personal items such as books or records that you find when you are clearing out your loft. This is not seen as a business and you do not need to declare these sales but if you purchase goods with the intention of reselling them for a profit then you must register as a business with HMRC.

Anything you sell that is yours – for instance, you have already used it or bought it by accident – is not taxable. Neither do you need to set up as a business.

But the moment you buy, make or take anything with the intention of selling it on you are a business and must register with HMRC as a business, whether you choose to be self-employed or even a limited company. You can of course be both a private and business seller, in which case you should use different ebay and bank accounts to keep them separate.

Here at CMA we help a number of businesses that trade purely online. Given the ease with which you can sell goods via eBay, the attraction to potential entrepreneurs is obvious. The start up and running costs are minimal, and you can easily run your business if you still have a regular job. However, despite how appealing setting up an eBay business may be, you need to be aware of your legal obligations – particularly when it comes to paying tax on your profits.

Things you should DO when starting an eBay business:

1. Set up accounts at wholesalers, preferably a credit account. This way you buy from the wholesaler, sell it on eBay, get paid and then pay the wholesaler 30 days later.

2. Open an account with eBay and get their free listing tool for your adverts.

3. Open a Paypal account so you can take payment via credit card.

4. Look for deductions that can offset against your income for example: Equipment Purchases, Business Expenses, Motor Expenses, Home Office Expenses and Travel Expenses.

5. Keep good records of everything that is bought and sold. This will also help in keeping track of orders.

6. Invest in an accounting software package that will help you with your business accounting.

7. You may need to consider registering for VAT if your turnover exceeds the current limit of £73,000 per year. VAT applies if you are selling goods throughout the EU.

If you have recently started to trade online or are thinking about this and would like to ask any questions then please get in touch and we will be happy to answer any questions you may have.

In this blog we are looking at business planning for 2012 and how to get the best from your employees and create a winning team.

Whether you are thinking about starting out or you have been running a business for a long time, here are some useful steps to take to build a great business:

• Assess where you are today – make a realistic assessment of your business and look at your strengths and weaknesses and what do you need to build on.
• Failure to plan is plan for failure – January is a good time to plan for the next 12 months. Set your sales targets for the next year and think about any new products or services you can offer your customers.
• Define your teams’ roles – make sure everyone in your business is clear on their respective roles.
• Identify Goals – Develop and implement a performance measurement and reward system to support your plans.
• Coach your team – Regularly provide guidance and training so that they are updated with the latest trends and issues in your market.

We are happy to talk to anyone about their plans for the next year and look at ways to help you grow your business.

It is the ambition of many people to run their own business. In recent years this dream has become a reality for some who have been made redundant, whilst others may decide to start up in business to be more independent and to obtain the full financial reward for their efforts.

One of the first major decisions you will have to make as you start your new business is the form of legal entity it will take.

The three main legal forms are sole trader, partnership or limited company.
Sole Trader
A sole trader is typically a business owned and operated by one individual. A sole proprietorship is perhaps the easiest form of business to own and operate because it does not require any specific legal organisation.

Partnership
In a partnership, two or more individuals join together to run the business enterprise. Each of the individual partners has ownership of company assets and responsibility for liabilities, as well as authority in running the business.

Limited Company
A limited company is a separate legal entity. A limited company has all of the legal rights of an individual and is responsible for its own debts. It must also file tax returns and pay taxes on income from its operations. Most importantly, the owners or shareholders of a limited company are protected from the liabilities of the business. The legal protection afforded the owners of a limited company can be useful.

There are a number of other things to consider; registering for Vat, employing staff and collecting paye tax, and perhaps most importantly setting up your bookkeeping systems to manage your business finances.

Here at CMA we can advise you on the best route go down when starting out in business. We can provide bookkeeping software free of charge to new customers and train them how to use this. If you would like to outsource this we can do you bookkeeping for you.

10 Top Tax Tips

1. Check Your Tax Code.
Most individuals pay their tax via PAYE. Your tax code determines how much tax you pay each week so make sure yours is correct so that your aren’t paying too much tax.

2. Business Mileage
If you incur business mileage as part of your job make sure you are claiming these back at the correct rate. The approved mileage rate increased to 45p per mile in April and if your employer reimburses at a lower rate then you can claim tax relief on the difference.

3. Other Business Expenses
There are some expenses that you can claim tax relief against if you don’t get them reimbursed. Good examples of these are teacher’s union subscriptions. These claims can be back dated for a number of years.

4. Consider Salary Sacrifice Schemes
There are a number of schemes available where employers could offer you a benefit other than a salary. These include child care vouchers and even a scheme to help you buy a bike. The benefit with these schemes is lower national insurance payments.

5. Company Cars
If you enjoy the benefit of a company car, consider a car with a CO2 emission below 75g/km. From 2011/12 there will be a tax rate of only 5% for cars with CO2 emissions of 75 g/km or less. Alternatively look at the option of a car allowance rather than the car itself.

6. Use your Pension
Pension contributions are exempt from tax. This means you can reduce your income tax by putting extra cash into your pension.

7. Rent a Room
If you are a home owner with a spare room you may be able to benefit from the rent a room scheme where you can receive up to £4,250 tax free.

8. Buy to Let Expenses
If you rent a property out remember to claim all your expenses incurred in connection with the property. This includes an allowance for mileage expenses visiting the property. If you make a loss on letting property, remember to offset it against future profits.

9. Self Employed and Working From Home
You can claim an allowance for expenses such as utilities, mortgage interest, insurance and telephones if you work from your residential home.

10. Choose Tax Efficient Savings
Simple steps like using up your ISA allowance can save considerable money.

Everyone likes to save money and it is surprising how few people actually take any steps to reduce their bills. However, if you take a pro-active approach to tax there is no reason why you can’t make significant savings.

Here at CMA will help both individuals and businesses stay on top of their finances.

Andy Hamer

Mark Brassington

Kathleen Goddard

Craig Green