Help!

Hi,
Not really used forums before so please point me in the right direction..
I run an eBay business from home selling men’s clothing. I buy from India and China in job lots and selling to mainly UK based ebayers. I have reached a point where by I’m turning over on average £2000.00 a month, and am stumped as to how to progress further.

Some points to consider about my current scenario:
This is currently a side line, I have a day job, which ideally I want to dump.
I’m not VAT / Company registered.
I can’t see the eBay side of the business progressing any further, but have good supplier contacts abroad.
I do not have much set aside to be able to invest to take this setup to the next level (whatever that may be).

If possible I would like your opinions of what I could do to progress this idea. Please bear in mind that I’m not a business man, and have got to this situation pretty much by fluke.

Thanks
Jim

Hi Jim,
Welcome to Stake.co.uk. Congratulations as you are one of our first members.

I think a lot of query depends on how much profit you are making from a turnover of £2k. And if you are not a registered company then you should be declaring profits on your tax return.

I think if you are importing that amount of product from overseas then you should have quite a bit of benefit from being vat registered in so much as being able to claim back vat paid.

Have you thought about getting your own website developed and selling directly online. I hear competition on eBay can be quite fierce...

Regards
Bob

Hi Bob,
Thanks for your welcome message.

Im making a healty profit - again in approximates £1500 of the £2000 is profit. Not declared anything on my tax returns (dont do any), so far moneys just been transfered to and from my paypal account. This is another issue as I've just had an email from Paypal telling me my account is under reveiw as I've turned over enough cash for them to take notice.

Am I paying VAT on products I buy from abroad? apologies for my ignorance.

You've hit the nail on the head with regards to my own website, but I thought the costs of getting a site developed would be prohibative. But I guess if I dont make the leap I will never know.

Do you know of any web site developers who I could get in touch with?

Many thanks for the advice
J

Jim,

When you import I thought you had to pay duty and vat on goods. And when you export I think these are vat exempt. Not sure though and I reckon the best way forward for you would be to ring HM Customs and Excise and ask them straight out - if you should be vat registered or not...Good luck.

Hi Bob,
Thanks for your response, have done a bit of research and found I am paying VAT and it would be benefical for me to register. I can claim back VAT not only on my purchases but my ebay charges too.
Regards

Hi Jim,
Again, welcome to stake.co.uk, good to have you on board.
I think you have done fantastically well with your ebay business espically as its a sideline.
There are many options for progression and I definatley think your own website would be perfect to complement your ebay business.
Being VAT registered gives confidence to customers and immetiatley adds credibility to your business, but legally you only need to be VAT registered if your purchases or sales will exceed £64k in your financial year.
Registering a limited company again gives the perception of credibility, but one of the main reasons for registration is the tax saving that can be made (this is some thing I can go deeper into, let me know and I'll explain).
The other big reason for registration is the liability 'the company' has to any creditors is 'limited' to any assets that are in company.

Obviously being VAT registered and a limited company increases your red tape and costs.

Regards
Parin