Hi everyone. I am in the process of setting up my first shop (exciting) - am wondering about other people’s experiences of opening their PayPal business accounts. I’m totally new to selling my stuff so a Business account seems very daunting - I’m not registering my business (no need with new £1000 tax allowance is there?) so can’t do that on the application for a start!!! Just want a hobby!! Did everyone else just dive in?
they forced me to open a paypal business account as I was trading, despite the fact that I am a pensioner and earning a pittance. However, it hasn’t affected me in any way and I love selling in my folksy shop…
It is the same with tax…I have to register as self employed, even though at 70 and with combined income (pension AND sales) all under £5k a year they insist that I fill in all the forms…daft but that is the rule…
Good luck with your shop. Folksy is a fab place to be and everyone here is wonderful and people are always here to help if you get stuck.x
Thanks Brenda - very interesting. Was hoping the new £1000 tax allowance for property and trading income would let hobbyists avoid having to jump through these hoops but that’s not the case is it!! Love your miniatures
I only have a personal account on Paypal. Unless it’s changed that was all I needed when I set up my Folksy shop…it didn’t specify it had to be a business one.
Thanx for your reply KBCreations. Maybe because I’m a new shopkeeper? Am loving the forum and I haven’t even sorted my shop yet!
I think I started off with a personal paypal account but switched it to a business one as I needed the ability to send invoices and things like that. Paypal has changed the things it allows you to do with the various types of account over the years so now you may need a business account to sell on line where as previously you could get away with a personal account. Folksy put together a simple how to guide which should walk you through it step by step so not daunting at all. https://folksy.uservoice.com/knowledgebase/articles/58078-setting-up-a-paypal-account
Paypal probably views businesses slightly differently to the government - it makes its money by charging merchants a fee for processing their sales. So the government might let you earn £1000 (remember thats sales value not profit) without registering as a business (I registered as self employed anyway - if you make a loss on your folksy shop you can claim it against other earnings and possibly get tax back) but paypal won’t as it has to make its money somewhere.
I still get the option to send invoices with my Paypal account and I pay the fees when people pay me and I get seller protection…so not sure what the extra benefits would be for a business account?
I suspect there may be some sort of yearly limit as to how much can go through the account, but I don’t sell that much!
That’s great info. Thanks to everyone who posted x
Hi, I have had a personal paypal account for years but I was made to upgrade a month ago for a site i was joining. It doesn’t seem to have made any difference for me and it seems more organised and easier to use for invoices, print outs etc… the fees are all the same as well x
Ok that’s good to know too. Think I just feel overwhelmed by the application process as I haven’t even made one sale yet and they’re asking for business registration details! This may be a tricky question but has everyone registered with HMRC?
I registered as online as self employed and now complete my tax return online - so long as you keep records as you go along (and I have a pretty basic spreadsheet to do that - no fancy software required) its really quick and easy. The help phone line people were very helpful when I had to query something about redundancy payouts on my first return so if in any doubt about whether or not you have to register then give them a call.
I recently set up a paypal business account to start selling on Folksy and had to contact Paypal for some help doing it and they were very helpful so don’t worry.
Yes my tiny little business is all registered HMRC and I have to send off tax returns for my TINY little shop. However it all quick and easy to do online. I started with a personal paypal account for years though, so do you need to change it? I wouldn’t have bothered but I was trying to start up another shop and they made me…If you don’t have to change, the personal does all the same I think x
I registered as self employed last year, done two online tax returns now, only doing the basic money in money out but it quite easy to do. I also use Brightbook for accounts it’s a free accounting program on line, you don’t need to download anything just register to set it up and keep it in your fav’s. It works out all profit & loss and works out your tax for you.
if you do open one call them for a chat. They have a special offer on fees at 1.4% for three months.
Also don’t be afraid to speak with them and use their support staff as they are amazing and tell you of products they offer that you may otherwise miss. I am a fan.
oh yes I’m registered with HMRC you must if you are selling to the public. You don’t want them coming after you for failure to register either.
I don’t have a business paypal account and they don’t tend to ask you to have a business one unless your annual turn over is rather high.
For the amounts that go in and out for us a personal one is fine and you can still produce invoices with it which is what I do when people ask to buy my knitting patterns on craft forums I send them a paypal invoice.
thanks for that, I shall take a look.
It is best to write to HMRC if you are not sure. That is what I did and they wrote back and told me I did not have to register. Now, with the new allowance you shouldn’t need to but for peace of mind I would check. It’s better to be safe. I still keep all my receipts, and have records of sales and expenditure if they wanted to check me out…
Remember though that the new £1,000 allowance is your income from your shop, not your profit.
If you make and sell something for profit you have to register with HMRC. They have stamped down in recent years on this and give out hefty fines if you are caught. I also have read other sellers on other sites actively reporting shops that they think are not registered.
It’s really very easy. I have a business account as it makes it easier when doing the books as you can access more features.
Thanks everyone for sharing your experiences. Think I will drop hmrc a line just to check because of the new £1000 allowance. Of course my sales could be astronomical and put me in the top tax bracket! Thinking positive …