Consumer rights: Do I have to pay tax on online auction profits?
A warning for people who trade goods and services through websites / How to take revenge on a high-charging bank / And the return of charity scams
Sunday 10 January 2010
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 firstname.lastname@example.org
Mark Dampier: 'We're on our own in retirement. They've pulled pensions to pieces'
Questions of Cash: I don't use Amazon Prime, but my credit card bill says I do
Buyers beware of new-build home headaches
Crippling PFI deals leave Britain £222bn in debt
Pension freedoms: How to deal with cold calls from scammers
- 1 BBC election debate: The one photo that summed up the whole 90-minute leaders debate
- 2 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 3 18th century sex toy found in 'toilet of sword fighting school' in Poland
- 4 'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
If I’m being racially abused I don’t need a white stranger with a saviour complex to rescue me
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
Russian warships in English Channel 'to conduct anti-aircraft and anti-submarine military drills'
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...
Day In a Page
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
This four-bedroom home has exposed brick chimneys and a vaulted ceiling in a breakfast room that's ideal for summer entertaining - the doors open to the patio and garden.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000