Millions of people in the UK are running their own business from home, but many may not realise their activities qualify them as small business owners in the eyes of the taxman.
According to a study by Direct Line for Business (DL4B), 65% of these home entrepreneurs are buying items specifically to sell online for a profit, while 2.8 million craft their own products to sell online on sites such as eBay.
The top 5% of these sellers are making a healthy annual turnover of £18,094. However, DL4B suspects many online sellers don’t realise this money-making on the side is actually considered as running a business from home.
For those running such a business, paying tax was cited at number 6 in the top 10 list of priorities.
When asked what their top priorities were, these small business owners placed their tax arrangements in sixth place, below buying more stock, setting sales targets and making plans for expansion.
Jazz Gakhal, head of DL4B says: “A large proportion of people clearly don’t view themselves as running a business, despite generating a sizeable turnover selling good online to be dispatched from their home. People should check with HMRC if their activitie online mean they qualify as running a business.”