Ebay Accountants, Yorkshire UK

Why Choose Sigma?

Specialists in ebay & online trading.
Legally, anyone can call themselves an ‘accountant’. Before becoming a ‘Chartered Accountant’ and using the designatory letters ACA or FCA, members must: undertake a period of at least three years training with an organization that is authorized by the Institute of Chartered Accountants in England & Wales, and pass tough examinations embracing financial management, auditing, business strategy, taxation and IT.

Institute members are expected to maintain high standards of ethical and professional conduct and must comply with the Institute’s new scheme of Continuing Professional Development, thus ensuring that their knowledge and skills are kept up to date. .

Tax Planning

Sigma tax planners

We can help you enjoy the significant tax benefits of being self employed. For example you will be able to claim annual capital allowances on your computer equipment and car (adjusted for business use) which will be fully tax deductible. You will also be eligible for tax deduction on their associated expenditure as well as postage and stationary costs, use of home office and much more. In some cases this may produce a loss which can be offset against other taxable income. We can also deal with more technical issues for companies such as capitalizing and amortizing your website in accordance with the new International accounting Standards.

Sigma has also helped incorporate many businesses which has allowed them to trade through a Limited company.

VAT & eBAY

Do I need to charge VAT on my eBay sales?

It is obligatory to register for VAT if your taxable turnover exceeds £58,000 p/a. If this is the case you will be legally bound to charge VAT at 17.5% on your sales and make quarterly returns to HMRC. It should be noted that there are significant penalties if this is neglected. The good news is that you will be able to claim back the VAT you pay on your expenses such as Petrol for your car when driving to the post office, Broadband fees etc.

Sigma has a wealth of knowledge on e-commerce business and can help you fully comply with HMRC (HM Revenue & Customs) requirements. We focus on our clients needs and tailor our services accordingly. The majority of our eBayers prefer to deal with us electronically and we have devised an excel based book keeping tool which is extremely user friendly & causes minimal disruption to business activities.

Recently HMRC (HM Revenue & Customs) has asked eBay for details of its top traders and are increasingly expressing concern that sellers were not paying eBay income tax/Capital gains tax on their profits/gains. The fact that eBay’s listings are computerized means that HMRC should be able to obtain an audit trail for each seller and any eBay income tax evaded will not be difficult to trace. The seller’s problem may be that he has not kept appropriate records, for example their end of auction purchase price of the item, actual post and packing costs etc.

Trading Online ?

Are you liable for tax ?
The tax rules are clear-cut. Anyone who is deemed to be buying and selling goods for profit is deemed to be a trader, and will be liable for tax with the potential for penalties and interest if that income is not declared.

Many of the occasional sellers on eBay will find that their profits (if any) are covered by either the chattels or annual CGT exemption rules (£6,000 & £8,200 respectively for tax year 2004/05). In this case no paying eBay income tax/Capital gains tax should be due.

Sigma has generally found that eBayers selling personal goods from around the house will not be accused of trading. (The case of Starkey V. Wernher [1955] 36 TC 275 implies that items transferred into stock from private use are done so at market value. The market value of an item sold on eBay is obviously its sale value on eBay and hence the profit is technically zero).

What could catch certain individuals is the profit that made on postage and packaging. However, once you consider the cost of driving to the post office and the actual cost of post and packaging, Papal fees etc, the overall profit on the transaction is tiny (Sellers would still be well advised in seeking assistance from a professional tax advisor if they are in doubt). More frequent traders however need to consider whether their activities may be regarded as carrying on a trade, in which case they will be liable for eBay income tax.

eBAY Activities

eBay Activities taxable as income?
HMRC use tests called badges of to try and identify a trading motive. The following "badges" are applicable to frequent eBayers who are enjoying an adventure in the nature of trade:

1. Profit seeking motive - an intention to make a profit.
2. A systematic number of transactions.
3. Transactions are similar to those of an existing trade carried on by the seller.
4. The asset is sold in a way typical of a trading organization.
5. The asset is brought and sold within a quick space of time.
6. The asset is purchased in order to resell it.

The fact that eBay’s listings are computerized means that HMRC should be able to get their hands on a rather useful audit trail for each seller. The seller’s problem may be that he has not kept decent records his end of the purchase price of the item and actual post and packing costs.

Our Fees

How much will this cost?
As we able to conduct most of our work electronically our fees are extremely competitive and can be as little as £30 per month for some businesses. Please get intouch with us for a quote.

Please note:

The content of this page is for information purposes only and detail within it has been simplified. It should not form the sole basis for a particular course of action. Sigma assumes no responsibility for any losses incurred as a result of acting or not acting on the above information. Specialist advice should be sought from a Chartered Accountant/Chartered Tax Advisor in relation to an individual’s financial matters.