You generally don't need a specific "trading license" just to sell online in the UK, but you must register as self-employed with HMRC if you earn over £1,000 in a tax year, follow consumer protection laws, comply with data protection (ICO), and get specific licenses for certain products (like food or dangerous goods) or if you employ people. The key is proper HMRC registration as a sole trader or company, not a general license.
Can I sell products without registering as a company in the UK?
You can start trading straight away without registering. However, you must register for Self Assessment as a sole trader if you earn more than £1,000 in a tax year (from 6 April to 5 April). You can choose to register earlier. Company owners need to register the company before they start trading.
HMRC's new rules for online sellers aren't a new tax but require digital platforms (like eBay, Vinted, Airbnb) to report seller data to HMRC from 2024 onwards if you hit thresholds: 30+ transactions or €2,000 (approx. £1,700) in a year, reporting due Jan 31st each year (2025 for 2024 data). This doesn't change tax rules for casual sellers of unwanted items (no tax if below £1,000 trading income), but actual traders (buying to sell for profit) still need to register for Self-Assessment and declare income above the £1,000 allowance.
You don't need a special licence to run a business from your home, but some business types do require you to be licenced before you can start offering services to customers.
Do You Need A Business License To Sell On Shopify In 2024?
What are the risks of online selling?
These include data security, website uptime, intellectual property infringement, fraudulent transactions, and much more. So keep reading to discover what key business risks you face and how you can solve them.
Can you sell food from home without a license in the UK?
If you sell, cook, store, handle, prepare or distribute food, you may be considered a food business and will need to register with your local authority. This includes food businesses trading: from physical customer-facing premises. from home.
* Scale of Sales: Small-scale, occasional sales may not require a business license in some areas. However, if you plan to sell items regularly, especially as a primary source of income, you are more likely to need a license. * Online vs. In-Person Sales: The method of selling can also affect licensing requirements.
Online selling is a business if you regularly engage in it primarily to earn a profit. If you earn a profit in any three out of five years, your activity is presumed to be a business. You don't have to engage in online selling full-time for it to be a business, but you must work at it regularly.
Amazon takes around 15-20% on average from each sale including referral fees, spending on advertising and other costs. This can increase further for Fulfillment by Amazon (FBA) listings. More than 60% of US-based sellers handle shipping and fulfillment for some or all of their orders themselves, according to Amazon.
It's your responsibility to tell HMRC about money you make on the side, not your main employer's. Income from side hustles isn't included on your payslip. If you don't tell HMRC about those extra earnings you might be given a penalty.
Do you need a business license to sell online in the UK?
If you plan to sell goods and services online, you don't need a special licence. However, you'll still need to make sure you have the relevant licence to cover your overall business activities, as we've discussed above.
You'll need to register with Environmental Health. This can be done by contacting your local authority and being transferred to their Environmental Health Department. Inform them that you are starting up a cake business from home and they will talk you through the necessary steps to get you registered.
Do I need to register as a business to sell online?
If you're selling products or services with the intention of making a profit, HMRC will consider you to be running a business rather than a hobby. That means you need to register either as a sole trader, a partnership, or a limited company, depending on your setup and future plans.
The Rule of 90 is a grim statistic that serves as a sobering reminder of the difficulty of trading. According to this rule, 90% of novice traders will experience significant losses within their first 90 days of trading, ultimately wiping out 90% of their initial capital.
You must tell HMRC within 3 months of starting your tax accounting period if your limited company is within the charge of Corporation Tax and is now active. The best way to do this is to use HMRC's online registration service. You will need to sign in with the company's Government Gateway user ID and password.
There are no explicit requirements, but a strong knowledge of how financial markets work, and comfort with electronic trading platforms and the rules and regulations of trading, is essential for successful day trading.
Selling online offers numerous advantages, including a global reach, lower overhead costs, and 24/7 availability. However, it also comes with its own set of challenges, such as intense competition, limited personal interaction, security risks, and logistical complexities.
KCSIE groups online safety risks into four areas: content, contact, conduct and commerce (sometimes referred to as contract). These are known as the 4 Cs of online safety.
