A serious question.

Former Member

A friend and myself want to use my websote to market clothes that we have designed ourselves. If we do this do we have to register as a business or not? I know lots of unsigned bands who sell their merchadise online who aren't registered or anything, and they make a profit. Surely we have to do something for tax purposes (although we're both students).
Does anyone know anything about this?

Former Member

A business has to pay tax on it's profits.

You can be a sole trader, which requires no registration, but makes you personally liable for any assets.
There's a booklet available from the Inland Revenue about small businesses.

I'm no authority on it, really.

Some accountants give free tax advice, you could also speak to your bank (business manager).

Good luck

Former Member

Depends upon how far you want to take it, and the chances of being found out.
At the very least you should keep a simple book showing money coming in and out of the business, and keep all your reciepts, copies of invoices, etc. Should the Inland Revenue catch up with you then you can at least give them those figures, and have evidence to back it up. A warning though, they may just estimate what they think you owe them - then add interest on top!
You don't have to be VAT registered unless your business earns quite a bit per year, I think it's currently somewhere in the high twentysomething thousand bracket.
If you're a sole trader, then it's probably best to declare your turnover on your annual tax return.
If you don't declare, then you may get caught out if you deal with a business (buying material, selling finished items), if the Inland Revenue examines their books, and wants to know more information about a transaction in their accounts.
If you keep it small, and just test the water with a site, and make sure you keep simple accounts, and all your reciepts, etc, then you could probably get away with it.

Mr_Wobble

Oh, just to add... I'm no expert either, but used to do a little freelance photography and writing. Wasn't profitable, so hardly paid any tax in all the years I was doing it. Made sure I kept accurate books, and all invoices, reciepts, etc, though, as they can require these for up to seven years.