One in six Britons run online business from home

Eight million people in the UK are now running an online business from home and may be unaware they qualify as retailers for tax purposes.

According to the research from Direct Line for Business, the sellers have turned to websites such as eBay to make a living or supplement their earnings from their day job by reselling goods for a profit or making their own products to sell.

The data suggests that the top 5% of private sellers on eBay are making an annual turnover of more than £18,000.

Head of Direct Line for Business Jazz Gakhal urged people to check with HM Revenue & Customs if their activities meant they qualified as running a business.  He added;

“A large proportion of people clearly don’t view themselves as running a business, despite generating a sizeable turnover selling goods online to be dispatched from their homes.”

The new personal tax income threshold is £9,440 and a significant number of online businesses will generate income above this.

In 2012 HM Revenue & Customs launched a campaign to clamp down on undeclared earnings by online sellers, generating over £650,000 in voluntary disclosure.

Of the 8 million believed to be running an online business from home 5.2 million are buying goods to re-sell at a profit whilst 2.8million are selling homemade products ranging from greeting cards to e-books.

The research found that almost 75% of home sellers kept stock with an average value of £4,388 in their homes.  This could have implications for the sellers’ home insurance policy since the goods may need additional business insurance.

When setting up their businesses from home, the research found that making tax arrangements and organising insurance came 6th and 8th down the list of priorities whilst buying stock and setting sales targets were the highest.

Recent figures from the Office for National Statistics (ONS) revealed a big increase in the number of Britons working for themselves, leading some to speculate the UK is witnessing a ‘self-employment revolution’.

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