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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5113
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am starting a trade-in business , where customers

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I am starting a trade-in business for electronics, where customers can exchange their used electronics for cash. At this stage I consider this to be an experiment as I am not sure that economics of the business are good enough. But anyway to test certain assumptions, I have created a web-site and started to advertise it. A few day ago I concluded the first deal and I am planning to make 10-20 deals before I am more certain if this type of business makes sense. At this stage the overall revenue will be £10-20k and potential income of £1-2k.
1) Do I need to register a company for this initial stage even I am not sure the business will survive after the initial testing
2) Is my current activity illegal? What consequences might it have?
3) Is I register as sole trader, am I allowed to pay cash to customers? Do I need to produce any paperwork in such transactions.
Thank you for your question..You don't have to register/form a company for this if you are uncertain about its viability.I don't think your activity is illegal.. you are buying second hand goods for cash and presumably selling to other customers with an aim of making a profit.You should register for self assessment as a sole trader and then file your accounts and tax return to HMRC.You can pay your buyers in cash but you should keep a record of all payments to support your accounts/income. Yes, you should maintain proper accounting records for all business transactions. I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond. and other Tax Specialists are ready to help you
Customer: replied 2 years ago.
Thank you. That is perfect!
I thank you for accepting my answer. Best wishes.