UK Working full time & having online Etsy shop

[Orion Black]

Hi there,

I have come here in desperation looking for advice and would be extremely grateful for any.

I work full time on minimum wage and have an Online Etsy shop where I sell low cost jewellery. I have had about 30 orders over the past few months. I am seriously confused about how, when or even if I should register my shop, or register myself self employed even though I do not yet make a profit.

My understanding so far is that I should register on HMRC using this form.. https://online.hmrc.gov.uk/shortfor...me=&location=40&origin=http://www.hmrc.gov.uk

Then register for NI2 exemption because I already pay NI on my Paye wage?

I am also confused about why I would need to keep receipts, will I be adding them all up at the end of the tax year and HMRC just take my word for my losses or do I have to send them in as proof?


Thank you in advance to anybody who may be able to help!

 

[Becky]

Yep, you need to register for self-assessment, and you could be issued with a penalty if you don't. There is some useful info here, including the link to register:

https://www.gov.uk/log-in-file-self-assessment-tax-return/if-youre-already-registered

It's worth bearing in mind that if you make a loss through your Etsy business you can set that against your employment income and potentially get a refund of income tax.

In terms of keeping receipts, you need to do this in case HMRC ever raise any queries into your tax returns. You need to keep evidence to back up the costs that you are claiming, although you don't need to send them in to HMRC with your tax return - only if they ask for them.

 

[Orion Black]

Thank you so much! I buy my supplies online, mostly eBay, should I be printing receipts or does my account act as proof?

Also, if I register now, when will I have to do a tax return by?

 

[Becky]

Digital receipts are fine, but make sure you have back ups just in case you lose the data. Don't rely on the ebay account data as they probably won't keep the information for long enough (you need to keep paperwork etc for 4 years).

Also, if I register now, when will I have to do a tax return by?

When did you start trading? If you started trading during the 2016/17 tax year (which started on 6 April 2016) then you need to register for self-assessment no later than 5 October 2017. You would need to file your first tax return no later than 31 January 2018, and that is also when you would pay any tax due.