Re: deductions from profit under the margin scheme selling used Ebay goods?

Ronald Raygun wrote:
> goped19 wrote:
>
> > OK Great...
> >
> > 14.9% = VAT
> > 41% = Runnings Costs
> > 19% = Corp Tax
> > 25% = Income Tax
> > 99% TOTAL!
> >
> > Okay so is it a feasible option to keep all profits within the business
> > which would only make the following deductable?
> >
> > 14.9% VAT
> > 19% Corporation Tax
> > 33.9% TOTAL
>
> Wrong total, it should be 31.1%.
>
> Remember, the 25% income tax only applies if you're a higher rate
> taxpayer, which I assume you are not.
>
> But you can't just blow away the 41% overheads. It costs money to
> run a business; this reduces your profits, and also therefore your
> corp tax bill. The overheads needn't amount to 41% of your ex-VAT
> trading profit. As you probably realise, I made up the 41% figure
> just so the joke total would come to 99.9%, but that doesn't mean
> you can reduce this exaggerated figure right down to zero. As TS
> said, even if you don't operate from dedicated business premises,
> and do all this from your spare bedroom, you'll still have at least
> P&P expenses.
>
> > How do I find out about what I can then do with the money if its
> > 'locked' in the business maybe using 'creative' accountancy??
>
> You can do whatever you like with it, including taking it out of
> the company into your own pocket as a dividend, and there is no
> tax to pay on this unless you already have a huge income (and if
> you had that, then frankly you wouldn't want to be bothered with
> running a no-hope type of business such as this -- I mean, how
> can you achieve a positive profit margin if you do your buying
> and selling in the *same market*, i.e. ebay? Why would people
> buy stuff from you when they can get it from the same source as
> you do, for less?).

Common sense would suggest you are right Ronald, but the fact is people
have made *very* serious money doing just that! Snowdon is interesting
because, unlike conventional businessmen, he plays his cards far away
from his chest. This is an exaggeration because he started his business
part time at Uni, but £182,000 at 22% Margin is £40k profit.

Fri, 4 Apr 2003

"Grebo" <g...@xxxxxxxxxxxxxxxxxxxxxx> wrote in message
news:b6kv76$fq9$1@xxxxxxxxxxxxxxxxxxxxxx
> ... you will be lucky to make money out of buying from trade and
> selling on ebay once you add Ebay costs etc. However, I may be wrong. What
> do others thing, it is not really as easy as this to make money on ebay is
> it?

I am 80% Ebay based (aside from the odd local & newsgroup related sales
etc). Today is the end of my first full year trading and my turnover
has
been a tad over £182,000 with a pre tax net margin of around 22%.
However I
deal in full PC systems & relatively big ticket parts mainly as opposed
to
general PC components. In June I plan to take the company full time as
it's
a part time venture at the moment.

Generally anyone who says you can't make a living off Ebay either
hasn't
tried properly or is just spouting hearsay.

--
Best Regards
Niel Humphreys
Snowdon Computers

.

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