Do I need to register my online business?

I've been selling items on ebay for just over a month now and have just created a website to sell the items from there as well. Do I need to register my business? I haven't made much money yet but hopefully I will start selling more in the next couple of months.

Can anyone tell me what legal processes are expected of me as my business grows?

Thanks for your answer... how much profit would I need to be making to register tax? So far I've only made a few hundred pounds.

The tax free personal allowance is 拢5225 this year, which means any profit over this amount this year will being you in to tax. Of course, if you already have other taxable income, this needs to be taken into account.

If you are in business, you need to register within 3 months of starting. This is because you will be liable to pay NIC's and these kick in immediately, with no 'NIC-free' amount. Report It

The only legality that you must deal with is the Inland Revenue Tax that may be payable if you return a profit. Whatever you do keep good records of income and expenditure and that includes all the costs associated with selling. If you never make a profit you will not be liable for tax but you must keep good records to prove this. As the business grows you will need a business bank account but these costmoney to run so do start one until you have a good regular income. See the Tax Office website for advice on self employment

well seeing as you will be self employed, you need to register your business with the inland revenue in order to for them to setup a self assessment account and issue you with a tax return form on 6t April (first one will come 06/04/08)

go to www.hmrc.gov.uk and search for a form called CWF1.
this is the form you need to complete and send to the Revenue in order to be registered as self employed.

make sure you complete this form and send it back within 3 months of the end of the month in which you started trading in other wise they will fine you 拢100. ie. if you started say in August, the forms needs to be submitted by no later than 30th November.

you will also have to arrange for a Direct Debit to pay class 2 National Insurance which is currently 拢2.20 a week and is normally paid on a 4 weekly basis. This can be done after the CWF1 has be processed and wil be back dated to the date you started trading.

the next thing to do, is sort out some form of bookkeeping in order to record all your expenditure and income.

I would suggest you keep a record on a spreadsheet for now and make sure you split your expenses into catagories for example, purchases (what you sell), stationery (paper, ink cartridges, postage / stamps, packaging etc...), and so on.

this will make it alot easier when it comes to prepare your accounts to go on your tax return.

also, make sure you have 2 folders, one for filing copies of your sales invoices and one for filing the invoices of stuff you buy. this way if you need anything you can find it in the folder.

you also gonna need to get an accountant, filing a tax return form and preparing accounts can be quite daunting and mistakes will be made, phone a few local accountants up and ask for a free, no obligation meeting to discuss you business, they will tell you what to do and how much their services are, but remember, you get what you pay for from an accountant, so dont be tempted to go with the cheapest as normally the service you get will be shoddy.

a good accountant will do the whole lot, get you registered as self employed, sort out your NI payments, complete the accounts and tax return and tell you how much tax to pay.

hope this helps.