Self Employed (Ebay - Paypal) Accountant Help

[alimohmand]

Hi Seniors,

I have query about my previous earnings. I am registered as sole trader with HMRC as well as employed.

I am trading on ebay for now around 7 months. I would like to claim earnings from my ebay trade. I have few queries I can show balance sheet including sales invoices etc via paypal but as in most cases instead of transferring the exact amount to my bank account, I have kept them in paypal for further purchases or paying suppliers.

My question is in terms of claiming previous earning, I am currently employed as well as running ebay.
My Salary from March 09 to Feb 10 is £18500 and my ebay revenue has been steady since July 09 to date my Gross turnover is £50k
In terms of showing proof of salary it is straight forward as I have original Payslips as well as supporting bank statements.
But in terms of claiming ebay income as mentioned I have not withdrew money from my paypal account but I do have a proof of monthly sales statement generated from Paypal as well as regular withdrawls sent to my bank account as and when needed.

Could you please advise what other sources can I show as evidence of income as self employed apart from an accountant letter.

Could please someone shed some light on my query.

Apologies if it is a long ended one.

Many thanks,
Ali

[Tim555]

Hi Seniors,

I have query about my previous earnings. I am registered as sole trader with HMRC as well as employed.

I am trading on ebay for now around 7 months. I would like to claim earnings from my ebay trade. I have few queries I can show balance sheet including sales invoices etc via paypal but as in most cases instead of transferring the exact amount to my bank account, I have kept them in paypal for further purchases or paying suppliers.

My question is in terms of claiming previous earning, I am currently employed as well as running ebay.
My Salary from March 09 to Feb 10 is £18500 and my ebay revenue has been steady since July 09 to date my Gross turnover is £50k
In terms of showing proof of salary it is straight forward as I have original Payslips as well as supporting bank statements.
But in terms of claiming ebay income as mentioned I have not withdrew money from my paypal account but I do have a proof of monthly sales statement generated from Paypal as well as regular withdrawls sent to my bank account as and when needed.

Could you please advise what other sources can I show as evidence of income as self employed apart from an accountant letter.

Could please someone shed some light on my query.

Apologies if it is a long ended one.

Many thanks,
Ali

Do you have a proper bookkeeping system?
If so do you use SAGE or QuickBooks? Than simply printout reports from SAGE/QuickBooks.
If not,
than prepare a Management Accounts and cash flow on excel/word and attached with original reports ( from paypal accounts summary, bank statements, or ebay sale reports).

Regards,

Tim

[alimohmand]

Hi Tim,

Thanks for your prompt response.

Unfortunately I do not use any of the above mentioned softwares.
I do have complete sales reports generated by Paypal showing monthly sales as well as Gross and net amount.
I can provide further details such as any amount withdrawn from paypal to bank account obviously a difference of couple of days as normal processing time took by paypal.

Do you reckon by providing paypal statement / Bank statement would they suffice the requirement of my application?

Look forward to hearing from you.

Thanks in advance.

Ali

[John]

I have few queries I can show balance sheet including sales invoices etc

Well, your Balance Sheet will not show sales revenue, will it. But your Profit & Loss Account will.

Have you actually prepared accounts showing the amount of your profit. It goes without saying that for visa purposes your sales revenue is irrelevant .... it is the profit that is important. Have you any idea how much profit you have made?

By the way, you did notify the existence of your business to HMRC, within 3 months of the business start date?

[alimohmand]

Hi John,

Thanks for your response,

I am registered with HMRC since August 09. I have prepared my accounts showing my profit. In terms of profit based at 20% it comes around to £10k - any expenses etc which is £3k so my net profit for the said time period is £7k.

So in terms of requirement do I need to show:

1 - Profit and Loss account / balance sheet prepared by my
accountant.

2 - Paypal Statements showing Money Withdrawn from Paypal
account to my bank account.

3 - Bank Statement showing Money received from Paypal

Please advise.

Many Thanks,
Ali

[John]

Certainly the accounts will be needed, but I am not sure the withdrawals from Paypal, or the receipt of that money in your normal bank account helps.

Why? Because you have not doubt incurred expenses, such as P&P, outside of Paypal, so withdrawals from Paypal are not indicative of anything in particular.

[alimohmand]

John,

I will update my query as in what is available and provided to my accountant.

1. Payment Received for goods sold on ebay. (Paypal receipts)

2. Payment made to suppliers (Paypal Receipts)

3. Ebay fee incurred (Deducted from paypal on Direct Debt)

4. Postage invoices as those were booked using online parcel booking
company. Hence I have all invoices for any postal costs paid by my
debit / credit card which are highlighted on my bank statement.

5. Payment Withdrawn from Paypal account to my Bank account.

6. Any Extra invoices such as packaging cost etc I have invoices for
those as well.

Would Paypal statement be classed as a seperate evidence in support to my earning?

Look forward to hearing from you.

Many Thanks,
Ali

[John]

Please see my previous answer.

[HSK Accountancy Services]

Hi John,

Thanks for your response,

I am registered with HMRC since August 09. I have prepared my accounts showing my profit. In terms of profit based at 20% it comes around to £10k - any expenses etc which is £3k so my net profit for the said time period is £7k.

So in terms of requirement do I need to show:

1 - Profit and Loss account / balance sheet prepared by my
accountant.

2 - Paypal Statements showing Money Withdrawn from Paypal
account to my bank account.

3 - Bank Statement showing Money received from Paypal

Please advise.

Many Thanks,
Ali

If you have all documents and proof of income then there should not be any problem. All you need is your PL, BS and sales summary prepapred by a qualified accountant.

If there is a genuine business going on then there is no need to be worried off.!!

By the way how much income you need to show from your self-employment income? As mentioned above your Net profit is important and not your sales revenue.

Your turn-over is reaching close to VAT limit so do dont forget to register for VAT if you goes above the limit.

[alimohmand]

Hi Shiraz,

Thanks for your input, so far my net profit is around 7k£. I am also employed and my Salary to date is £18500.00 I need another 1.5k£ to meet the requirement.

Business is geniune as I have been selling on ebay for quite sometime though I have recently registered as Sole Trader as I am doing that pretty much full time with my permanent job.

Please advise in terms of 2 sources what shall I hand in?

Would Paypal statement be considered as proof of earning apart from Profit and Loss and BS.
My year end is also approaching in April Where, I d be filling for self assessment etc.

Look forward to hearing from you.
Many Thanks,
Ali

[HSK Accountancy Services]

Hi Shiraz,

Thanks for your input, so far my net profit is around 7k£. I am also employed and my Salary to date is £18500.00 I need another 1.5k£ to meet the requirement.

Business is geniune as I have been selling on ebay for quite sometime though I have recently registered as Sole Trader as I am doing that pretty much full time with my permanent job.

Please advise in terms of 2 sources what shall I hand in?

Would Paypal statement be considered as proof of earning apart from Profit and Loss and BS.
My year end is also approaching in April Where, I d be filling for self assessment etc.

Look forward to hearing from you.
Many Thanks,
Ali

Your PL, BS and sales summary and letter from your accountant will be enough. Your paypal statement will be useful to varify your sales summary so that will be considered as proof of sales but not earnings (because earnings are sales - expenses)

If you are going to pay tax in April then that can also be used as
second proof of income.

Hope that helps.

If you need any specfic advice then pm me or email me and I will be happy to help.

Cheers