eBay Business TAX?

sham09

Hi ,

I am looking into starting a business selling electronics on eBay.

Currently, my plan is to import the electronic items from Hong Kong/China, and have them shipped direct to me in Ireland. I will repackage them and sell them on eBay. I will then ship my items from Ireland using An Post etc...

I plan to operate this business part-time with a friend. We are both currently employed and are registered as PAYE workers. We are wondering which is the best route to embark on with regard to company registration. Do you recommend we : (A.) Register as a Sole-Trader Or (B.) Register as a Limited Company.

I understand each of these has its own unique advantages & disadvantages, but in our situation I am wondering can anyone shed some light for us with regard to Tax & VAT etc...

We are completely lost when it comes to VAT. As we will selling items which we will be importing from another country, we are unsure whether we must pay import tax/duty on these goods? We are unsure whether we have to charge VAT on our sales, or collect VAT for the Revenue Commissioner. It would be most appreciated if anyone with a knowledge in this area could help us out.

We are very ambitious and feel in this current economic climate its the best time to start a little business of our own!

Thanks in advance, I look forward to hearing from everyone

jor el

I think you need to talk to an accountant. You shouldn't be starting a business if you don't understand VAT.

Since there's two of you, you cannot be a sole trader. Partnership is what you want there. You'll need a solicitor to draw up an agreement first.

If your business is going to be VAT registered (which it probably should be), then you won't pay VAT on the imports, but you will collect it on your sales. This will then be returned to revenue at year end. Either that or you will pay VAT on the imports, and this will be credited against your VAT returns. Either way, the business effectively doesn't pay VAT, but charges VAT on all sales.

Some more information here, also in the sticky here.
Also see the Entrepreneurial & Business Management forum, where a lot of your questions are already answered.

Briantheplumber

you only need to register for vat if your income is likely to exceed €70,000 per annum in respect of the supply of goods or €35,000 in respect of supplying services. So I dont think you will need to register for vat.
By law you do need to pay import duty but customs and excise will write to you if they need some money (they dont always tho, usually only on parcels from the USA), you can write off these expenses against your income tax.
All you need to do initially is both of you to register for income tax (FORM TR1) and send in your tax returns at the end of the year. Download IT48 off the revenue website, its a guide to setting up in business, I found it very usefull

Best of luck with your business venture.

Mr. Incognito

There is a thread in the stickies on starting a business.

Read the charter and consult a professional with specific queries.

I'm locking this.