online Store or ebay

[qandaseeker]

i want to open an online business. either my own or on ebay.
im little curious on the tax and fees i have to pay on a item i sell. i want to know which is cheaper to trade with. im famililar with the ebay fees(listing fees & final value fees), but i need more info on whether i need to pay any tax or VAT if i sell on ebay. likewise the same on my own online store.

thank you for all you answers

[Ethel]

I have no idea how much it will cost to set up your own website and trade online away from eBay.

But the tax situation is simple. If you buy goods or raw materials within the intention of selling you must inform the Inland Revenue within 3 months of starting the business or face a fine.

You pay tax on profit: price sold for minus cost price and associated fees.
You register for VAT if your turnover of taxable supplies exceeds �67000 in a year.

This is the case however you run your business.

You should also make sure you are familiar with the legal obligations of a business seller under the Sale of Goods Act and Distance Selling Regulations

[chas2008]

Ethel has covered most of the tax implications etc. as regards E bay or you own site , it comes down to finance.
E bay is a good way to test the water as it were, cheap,easy and quick to get up and running with no long term commitment and with the paypal system no problem accepting payments from day 1 . It also has a lot of site traffic which with a cheap or poorly setup web site wont happen.

[qandaseeker]

i understand momenterily teh VAT Rate is 15%, but if this is applied to a turnover which exceeds �67k, what % tax do you pay if your turnover is below this figure?

And is it true you pay the rate set by the country where your business is registered?

e.g France VAT Rate is 25% i believe!
Dubai VAT rate is 0%

so, if i register in dubai, would this save me money?

im sorry for the long query, but id really appreciate if you help me

thank you

[Ethel]

Tax and VAT are two different things - don't worry about VAT for now.

Unless you have a very thorough knowledge of tax laws, which you don't seem to have, don't even consider trying to dodge your tax liabilities by setting up an offshore company.

Don't think about setting up a company yet - just register yourself as self employed with the Inland Revenue.

[CWA]

Hi, i just have an addition to the original question (first time on AnswerBank, I'm not sure if I should have started a new questionor not?).

Anyway, like 'qandaseeker', I am looking to open an online eBay shop, with a business account. I understand that I am selling to make a profit therefore should be a legitimate business and declare myself as trading commercially etc.. but I plan to run this online shop whilst studying as a full-time student in university, and i will potentially have another part-time job at the same time (barwork etc). Does this still mean that I need to declare myself as 'self-employed'?

How would i go about declaring my commercial trading to the Inland Revenue/HMRC and what would my kind of.. 'status' be? Student/Self Employed? I would ideally like to trade under a business name also, would this still be possible?

I hope this is worded well enough for you to understand..

Thanks in advance

[derekbrown476]

Taxes, especially VAT will depend on which country you stand to, If you are an EU resident and use any eBay site to sell items on a European eBay site, you may be charged VAT based on EU laws and regulations. eBay does not charge VAT for other uses of non-EU sites.

As well as Ebay, if you run your own online store, the taxes and regulations are very depend on regulations in your country, please refer to public court in your area for more information.

Sources :
http://pages.ebay.com/help/account/vat-main-selling-country.html
http://www.izzonet.com/streetwise-ecommerce/building-an-online-business