I'm selling some stuff on an online auction site to make a bit of money to pay off my Christmas debt but my sister says I'll have to pay tax on the money I make. Is that true?
It depends on whether you're classed as a trader. If you're selling clothes that no longer fit you or junk from the attic and you aren't buying and selling goods online with the intention of making a profit, you're not a trader and you don't have to declare the income on your tax return.
But if you qualify as an e-trader you do have to declare the income you make. You are trading if you buy goods specifically to resell online; make items yourself and sell them to make a profit; sell or buy goods for other people and get some sort of commission for doing it; or provide a service and get a payment in cash or in kind.
If you are using auction sites to trade and generate income by buying and selling goods or services, you should be registered as self-employed or as a business. You have to pay tax and National Insurance and declare all your income to Her Majesty's Revenue and Customs (HMRC), but it also means you may be able to claim allowable expenses, such as the cost of using your computer and broadband service for your business, for postage and packing of the goods, and using room at home as your office.
It would be best to talk to someone at HMRC's self-employed helpline on 0845 915 4515 to find out whether you need to register as an e-trader. Even if you're employed and just doing this in your spare time, you may still have to register as a self-employed trader. You can find out more at www.hmrc.gov.uk.
You must also be aware that your customers who buy goods and services from you have consumer rights. The Trading Standards office at your local authority can help, or try Business Link, which has most of the information you'll need for running your business: www.businesslink.gov.uk The small print on the auction site's terms and conditions will help you too.
I've just been charged for going overdrawn and I'm so fed up about it I want to change my bank. But I have quite a few direct debits which go out of my account on set dates. How do I get it all set up so that I don't miss my payment dates for bills?
Banks and building societies have to follow strict guidelines that make switching your bank account as quick and easy as possible. Many accounts now offer a switching service, so your new bank takes care of switching over all your direct debits when you open a new account with them. First find the bank you want to open the new account with. Take time to shop until you find one that does everything you want it to do. Look for the best rates of interest and check charges on overdrafts and other services. Look out for extras – some accounts offer things like free breakdown cover on your car or free travel insurance – but check for monthly charges or minimum amounts you have to pay in each month to qualify.
Once you've decided which account you want to open, go to the new bank and give it details of your old bank and your account. You'll need to have two forms of identification – one to prove you are who you say you are and the other to prove where you live. At most banks, you have an application form and a transfer form to fill in. After that, the entire switch is automated by the bank. Check that your new bank will offer an interest-free overdraft to cover direct debits and standing orders that go through before money is paid into the new account. To be on the safe side, you can have some money in both accounts until you're happy everything is operating smoothly before you close your old account.
Your new bank will tell you when everything is in place and will ask your old bank to cancel any direct debits you no longer need. Your old bank has three working days to pass information to your new bank. This includes details of all your direct debits and standing orders along with your credit history. Your new bank has 10 working days to open an account for you once your application has been approved.
Don't forget to let anyone who pays you money – such as your employer – know that you have a new account and give them all the details.
I found a bag on my doorstep this week asking me to put in any old clothes for charity. I've just had a clear-out and given stuff to the local hospice so I won't be making a donation, but I wonder if this could be a scam. The leaflet says the clothes will go to "poor families in Eastern Europe". I thought there was a spate of this a few years ago. Could it be starting up again?
These kinds of scams have never really gone away. They die down when there's a bit of adverse publicity and then start up again when they think everyone's forgotten, or are in a particularly charitable frame of mind – round about this time of year. The Association of Charity Shops estimates that legitimate charities lose about £1m a year in clothes and other items as a result of bogus collections. So you're right to be wary of doorstep requests for unwanted clothes, shoes or household and electrical goods and bric-a-brac. If this is a scam, anything you put in the collection bag will be picked up by a commercial operator which will sell the goods for profit. The leaflet you've got will probably have a registration number on it to make you think it's a registered charity. Contact the Charity Commission helpline on 0845 300 0218 (or 01382 220 446 in Scotland) to check whether the collection is for a registered charity and call your local authority to see if the collector has been licensed. You should also call Consumer Direct on 08454 040 506 or use its website to report a scam. Go to www.consumerdirect.gov.uk and look under Consumer Issues for the "report a scam" link. There's a form to fill in and the relevant authorities will be alerted. The collection may be genuine, but if you'd rather not take the risk always give your unwanted items to the local charity shop.
Do you need a financial makeover?
Write to Julian Knight at the Independent on Sunday, 2 Derry Street, London W8 5HF email@example.com