Tax Amnesty for online businesses

Thanks to a couple of threads on Folksy that someone else on Etsy pointed me to, I've realised that HMRC are running an amnesty for people who haven't yet registered with them as self-employed but want to get their tax affairs in order.

Find out about it here:
http://www.hmrc.gov.uk/campaigns/emarket.htm

You have to tell HMRC you want to join the amnesty by 14 June 2012, and pay all tax owing by September.  I've got a professional exam coming up (one day I'll say enough to exams!) so I can't pre-digest it for you.

Also found through the Folksy/ Etsy threads is HMRC's YouTube channel.  Who knew!
http://www.youtube.com/user/HMRCgovuk?feature=watch
Worth a look, there's a video on working out whether you're trading or not...

It's ALWAYS a good idea to get yourself sorted with the taxman sooner rather than later!

Lois
TootHillMedley

UPDATED TSCB 1: For new rules on registration for Income Tax and NIC and penalties

I'm just highlighting that I have made amendments to TSCB 1 article here

In the article I advised that
(1) once trading, the newly self-employed should register for income tax & Class 2 NIC on Form CWF1 within 3 months of starting up.
(2) that the penalty for failure to do so was a £100 flat penalty.
(3) ignored the new tax geared penalty regime and changes in the deadlines in the article.

TSCB: Are there alternatives to hobby or fully self-employed?

Yes. Casual earnings in Other Income (Box 16 on the basic return).  I've done a post on the Etsy Burning Issues thread about it here & added a paragraph to TSCB 1: When will HMRC be interested in me?

But it comes with an enormously huge and giant health warning - don't do it just to avoid the hassle of the self-employment registration & annual tax return.  And certainly don't say 'oh but this blog on the internet said it was ok for me to do it' - I didn't at all!  You have to take responsibility for your own tax affairs, all I'm doing is helping people find the information they need to make an informed decision - you need to read up HMRC guidance to decide what's legal and appropriate for your personal circumstances, not just read what I'm highlighting and hope it applies!

I will eventually do a post on it, towards the end of this current series.  But am just bringing it to your attention in case it applies to you so you know about it before the 31 January deadline at the end of this week.

TSCB 7: Those rules apply to me? How? Summary of Expenses so far

As we’ve now reached a grand total of 7 articles in the Tax for Small Craft Business Series, and quite a few people are showing a bit of bewilderment, there’s a couple of points I think I need to emphasise, and also examples to share about how the rules can be very simple really. No, honestly they can, although perhaps not so much for craft businesses because of the stock valuation issues.

This post follows the steps a brand new small crafting business (a made up person called Alice’s made up new venture making & selling fudge) takes to get her first year’s figures into their Tax Return, based on the issues about trading periods and the sorts of expenses we’ve covered so far – so it’s not complete by any means, but should give you a bit of help to understand how what we’ve covered operates in real life.

The example ended up quite long, so it’s in two parts:

• Today’s post covers how to deal with all the ‘normal running costs’ expenses – that is anything that’s not ‘stock’.
• The second part (available on Wednesday) will cover the ‘stock’ expense and a bit more on stock valuation, and getting the figures into the Tax Return itself.



Featured Seller: BrightStar 109 (Claire English) See her Etsy shop here

and about her work at the foot of this article

TSCB 1 - When will the Revenue be interested in me?

The first thing you need to know is that the way you are taxed in the UK depends very much on particular circumstances: if you fall into one set of rules, you're taxed differently to falling into another set of rules.  It's very important that you understand that the rules are cumulative, your facts need to fit the rules in the order HMRC has laid down, you can't just jump ahead and think 'oh yeah the second bit applies so the result is for me' - nope ALL of it has to apply: and the rules can be quite intricate, so you ALWAYS need to go and do the extra reading before taking a decision on anything I'm writing about!

So, the first question you need to ask yourself is whether or not HM Revenue & Customs (HMRC for short) are going to be interested in you selling your stuff.  The answer depends on what sort of stuff you are selling and what your intentions are - are you a hobbyist or a trader?