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EBay Traders and Online Traders – Do You Need to Register as Self Employed with HMRC?
 Tens
of thousands of people are making money out
of eBay every day, yet a large number are
unaware that they may be required to pay tax
and register as self-employed.
A new internet-based guide, accessible via
the HM Revenue & Customs (HMRC) website for
people who trade online is being launched.
It outlines the rules for people who trade
online for a profit, as opposed to others
who are just clearing low value items from
the attic.
Online traders are considered to be
self-employed if they:
* Sell goods they bought with the intention
of re-selling them;
* Make items themselves and sell them,
intending to make a profit;
* Sell or buy goods on behalf of others for
financial gain (on commission); and
* Provide a service and receive payment in
cash or in kind.
If your answer is yes to any of these, you
may need to pay Income Tax, National
Insurance Contributions and fill out a
Self-Assessment return. You may also need to
register for VAT. E-traders who are starting
a new business need to let HMRC know within
three months of starting trading. HMRC has
made it easy to register over the phone via
the Self-Employed helpline: 0845 915 4515.
If people are selling the odd item such as
unwanted presents or possessions, and are
not buying goods to trade for profit, they
are considered to be a non-e-trader and do
not have to pay Income Tax or National
Insurance.
HMRC's Stuart Hartlib said: "In the new
guidance, there are examples to help you
work out if you have to pay tax when you
sell items online. You can also access
information related to online trading about
issues such as Capital Gains Tax and VAT.
"This site is designed to make registering
and paying tax easier, so you can work out
whether you are self-employed and need to
file a return."
The online trading guide can be found at the
HMRC site.
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