Want To Start An Online Shop - Tax Questions

[jp_2031]

I want to start my own online shop, run and managed by myself. I currently work and make 25k a year in my job, but I want to do this alongside my job. I understand that I have to pay 20% of profits in tax - but my question is, if I reinvest my profits back into stock for the first 6 months, is this taxable income, or does it count as an expense?

[jp_2031]

secondary question to this - what exactly can I put in expenses? I have to do this from my home, using internet from my home etc - are these expenses, as without these I couldn't actually run my business? I don't expect to make mega profit, but I'm just trying to work out how much things cost before I invest any cash.

[factor-fiction]

You need to go on the HMRC website- there's lots of info on there about allowances you can claim. You will need to register for self-assessment I think

[jp_2031]

I went to the HMRC website but didnt see anything that answers my questions. I cannot yet register as a sole trader yet since I am not yet a sole trader - I was looking for information before I made the decision :)

[factor-fiction]

Some of the points about expenses incurred in working from home are covered here
http://www.hmrc.gov.uk/incometax/relief-household.htm

More stuff here about tax for self employed
http://www.hmrc.gov.uk/working/intro/selfemployed.htm

[boxtops]

You might want to check the council tax position too, if you are working from home. http://www.voa.gov.uk/corporate/Publications/workingFromHome.html

[andres]

And Home Business Insurance.