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An Accountant's Guide to Company Registration, VAT, Tax and Employment

Discussion in 'Money, Accounts & Finance' started by ladyvgw, Sep 12, 2010.

  1. Dean_357

    Dean_357

    Joined:
    Jun 26, 2012
    Messages:
    14
    Nice article, answered a good few questions I had, thanks.
    Cody and ladyvgw like this.
  2. Baliw

    Baliw

    Joined:
    Nov 11, 2012
    Messages:
    53
    First of all I would like to say a big thank you for a very informative post, there is a lot of information to take in and I will have to read through it again to make sure of some points, however, I have a few questions if I may ask them?

    A short background on me, I work for a major company as a Sales Executive, have a company car and only pay for private mileage, I mainly visit retailers every month in my work, my questions are as follows:-

    • I am new to this, was looking to have a trial period to see if it is something that I could make work, so as long as I have all the paperwork upto the 3 months, am I ok not to inform HMRC until I am sure?
    • I will be initially selling to friends and family to increase my revenue to invest back in to stock, but will look in the near future to sell to retailers, obviously, receipts will be given, do I include tax on them?
    • If I do include tax, do I have to register VAT with HMRC?
    • As stated above, I have a company car, do not pay petrol for business use, but would be selling to retailers during my normal work day too, so therefore would not be able to claim that back, if I notified HMRC that I was self employed, would it matter that it was a company car and that I only paid petrol for private use?
    There are more questions that I may have, but do not want information overload at the moment, so I hope that you may be able to answer the above for me and that they may also be a help to questions other people may have.

    Thanks

    Lee
    Cody likes this.
  3. Gary

    Gary

    Joined:
    Aug 22, 2009
    Messages:
    16,358
    1. You would be better off registering straight away, if trade anything you would still need to complete a self assessment tax return (and income tax would be payable on all profits as you would have used your allowance in your job).
    2. If you are not registered for VAT then you are not allowed to use VAT at all, so no, just leave this off unless you are registered for VAT.
    3. As with no. 2, you cannot charge VAT (or mention it as included) unless you are registered, and you do not need to register for VAT unless your turnover exceeds £77,000 in a year, you can register voluntarily but there are no real benefits to doing this (unless you have to for your supplier but sometimes it's easier to either talk to them or find another supplier depending on availability and pricing).
    4. I'm not sure that an employer would allow a company car to be used for your own business (I would be surprised if they did), but if so, I would assume as long as mileage is recorded correctly then you could still claim it, but maybe get verification on that one as I have not come across this before.
    Hope this helps!
  4. Baliw

    Baliw

    Joined:
    Nov 11, 2012
    Messages:
    53
    Hi Gary,
    Thank you for your reply to my questions. That does help me a lot.
    With regards to number 4, as stated, I would be doing my business the same time as the work for my employer, so would not be able to claim any business mileage back, as I do not pay for the petrol, I only pay for private use. I just wondered if would matter if it was a company car, but I do not have to put mileage on the tax return form.
  5. Gary

    Gary

    Joined:
    Aug 22, 2009
    Messages:
    16,358
    You're welcome, regarding the company car, if you're not claiming anything for it then there's no need to even mention it to HMRC.

    All the best with your business!
  6. Luigi24

    Luigi24

    Joined:
    Oct 30, 2009
    Messages:
    306
    Hi guys,

    I'm a bit confused about who needs to register for VAT. From my understanding if someone is trading on ebay uk and amazon uk, then they are trading in the UK and are required to pay VAT. I came across an article about people from China selling on ebay UK and not paying VAT because the goods are not located in the UK, hence the confusion. Anyone know the correct legislation on this?

    Thanks
  7. phoenix76

    phoenix76

    Joined:
    Jan 5, 2013
    Messages:
    42
    Hi Vicky,

    Thanks for this fantastic guide.

    I am a newbie here and need some advice on becoming sole trader. I am currently doing market research for setting up ecommerce business. I want to register as a sole trader but I can't give my home address as a business address as per clause in the rent agreement with landlord. I did find out about registered address (mail forwarding) services but they primarily cater to ltd. companies. I do not want to spend on renting office space as my business can be run using just laptop from home and I am tight on budget. Accountants do allow to use their address but I don't need accountant till my business grows.

    Any suggestions, please.

    Thanks in advance...

    Amol
  8. ladyvgw

    ladyvgw

    Joined:
    Aug 14, 2010
    Messages:
    5,097
    Jeez how did I miss this one! I know its over a year ago but you are still an active member so just wanted to say sorry for not replying. If you still need some help let me know :)
  9. ApolloV

    ApolloV

    Joined:
    Nov 15, 2013
    Messages:
    10
    I could do with some advice about my situation.
    A couple of weeks ago, I registered as self-employed with the intention of buying stock and selling it online. Before that and for the last 3 or 4 months, I have been selling all sorts of family household bric-a-brac on ebay and I would like to continue doing that as I have more stuff to sell. As I was selling my unwanted personal items and it was on a small scale, I was treating it as a hobby income.
    The question is, do I need to declare my personal ebay sales as part of my self-employed income and if so, do I need to declare the income that I earned before officially going self-employed?
    Any advice would be much appreciated.
  10. Gary

    Gary

    Joined:
    Aug 22, 2009
    Messages:
    16,358
    No you do not need to declare the sale of personal items, only items bought for resale
  11. ApolloV

    ApolloV

    Joined:
    Nov 15, 2013
    Messages:
    10
    Thanks Gary.
    For the short term, I was thinking of using the same ebay account for business and personal sales, would that be a problem?
  12. Gary

    Gary

    Joined:
    Aug 22, 2009
    Messages:
    16,358
    You could but it would be easier to separate if separate accounts, and technically ebay say that you should use a business account if buying to resell (though many don't).
  13. ladyvgw

    ladyvgw

    Joined:
    Aug 14, 2010
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    5,097
    Some of this advice may be a bit out of date now so I will try and bring it up to date if needed :)
    Cody likes this.
  14. raihanasulthana

    raihanasulthana

    Joined:
    Jun 12, 2016
    Messages:
    3
    Hi

    I am starting a new company , but if i register for VAT is there an option for not paying for VAT till i reach the threshold ,but at the same time can i claim the VAT back for the purchases i make from the supplier, or once i register for VAT then i have to submit VAT return every 3 months and pay VAT, Please can you shed some light on this
  15. bestdeals1711

    bestdeals1711

    Joined:
    Aug 29, 2016
    Messages:
    5
    Thanks Vicky, would you know anyone who can guide on setting the business in USA?
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