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Originally Posted by mug2k
Hi
I'm looking to start selling on ebay soon and understand that I'll have a personal allowance of around £6k and if I earn make less than 17k profit I can claim tax credits. As it 'll be my first year trading I doubt I'll get anywhere near 17k. Any way have a few questions.
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1. When importing I know its common (not legal) to have the value lowered to pay less tax and duty. The upside is obviously the money saved but what are the negatives ?
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I would say very severe if it were discovered you were mis-stating the value of goods imported. Never ever mess with the taxman.
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2. Once you register as a business I believe you are able to claim expenses to lower your income tax liability. What are things you can claim for as expenses ?.
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Go and see an accountant, you cannot claim expenses on everything.
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3. I am living at home and my business for the most part will be run from my bedroom. Will I be able claim the rent I pay my parents as expenses ?
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You may invalidate your parents home and contents insurance as you'd be running a business from home, you'd also have to notify your local council that you are running a business from home. Also a lot of red tape to do with health and safety etc..
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4. Am I legally bound to offer warranties on the products I sell ?
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Customers have the rights to return any items to you for whatever reason within 7 days for a refund or replacement under DSR (Distant Selling Regulations).
That is in addition to the 30 days that a customer can return an item in for a refund/replacement.
I think there is an automatic manufacturers warranty on new items. Another thing to remember that not many people know about, especially in the UK, That a customer can still return an item to you many many years after they have purchased it and get the same or similar model at current market price or a refund.
Income Tax - Tax Credits & Questions
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November 2009
