Ann Summers Reps

lmiddleham

Hi

I guess this is an ususual topic but hopefully someone will know.

My girlfriend has been invited to become an Ann Summers rep but I'm a little dubious on what they regarding tax.

The rep she discussed it with said that you don't have to declare or pay tax on the commision earned and that you're not self employed.

However, I've seen some articles online stating that you are self employed if you do this.

I also got my girlfriend to go back and ask that if we're not self employed, is the amount we're getting in commision, the amount after Ann Summers have sorted out tax deductions at their end. The rep has forwarded this query to her area manager.

What do you think. Is an Ann Summers rep self employed or an employee?
If an employee then Ann Summers should deduct the tax I imagine, but if self employed, surely this income is taxable and a return stating commision less expenses should be filed and a declaration of being self employed should be made?

Thanks for your input

slackda

Pretty Sure you fall under the self employed bracket, as used to have a friend who did this, will drop her a mail and find out, what she did.


And yes this is taxable income.

Claire321

A colleague I work with is a Virgin Vie rep and they are told they are classed as self employed and need to declare all earnings, less expenses on their tax return

Monsoon

It is self employed. There are definitely no tax deductions at HO end. They don't tell you you have to register though. They say you only have to declare for tax once you get up to Unit Organiser level, where you get a % cut of your unit's sales. They imply that when you're just a basic Party Organiser you don't have to declare anything.

Unless you're really good at it, you don't make much profit after taking into account raffle prizes etc.

lmiddleham

Thanks for all the quick and helpful responses.

Very interesting that they don't mention declaring for tax at any level. I'm sure the taxman would want his share regardless (although whether they'd go through the effort of monitoring reps for the little bit of money they'd get is another issue)

Also the cut of sales. I knew there'd be someone, somewhere taking a cut. The rep she spoke to said she'd only get a voucher (which may be true, she might not be a Unit Organiser) but I knew that someone would have a slice of the pie!

Thanks everyone!

Monsoon

Bear in mind it was 10 years ago when I was a PO so it might have changed but back then:

PO - sells for full price at parties, places order and buys stock @30% discount.
UO - looks after a group of POs, gets a small % for each order her girls place as well as doing her own parties
AO - Area Organiser - looks after a county or region, gets a cut of the UOs and POs sales under her.

As Ann Summers head office arrange the % payments to the UO and AO then HMRC gets in the loop (I don't know if it's employment or not, never got that far, would guess so as there are options to get company cars etc).

At basic PO level they never advise you to register with HMRC and I guess most girls never find out on their own if they need to (and therefore don't?).

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Changed username: ex faerie9!

marknotgeorge

Monsoon wrote: »

Bear in mind it was 10 years ago when I was a PO so it might have changed but back then:

PO - sells for full price at parties, places order and buys stock @30% discount.
UO - looks after a group of POs, gets a small % for each order her girls place as well as doing her own parties
AO - Area Organiser - looks after a county or region, gets a cut of the UOs and POs sales under her.

As Ann Summers head office arrange the % payments to the UO and AO then HMRC gets in the loop (I don't know if it's employment or not, never got that far, would guess so as there are options to get company cars etc).

At basic PO level they never advise you to register with HMRC and I guess most girls never find out on their own if they need to (and therefore don't?).

______________
Changed username: ex faerie9!

My wife was quite a high-achieving UO a few years ago. She says they certainly should be told by their UO that they are self-employed. I have heard of at least one UO being stung by the Revenue.

Can I just add that UOs and AOs are classed as self-employed. There's also downlines - a PO can become a UO by recruiting half a dozen or more new POs, budding off kind of like how hydras reproduce. Her 'mother' UO then gets a cut of that unit's sales. This can continue ad-infinitum. Cars are funded by the qualifying UO taking a reduction in her percentages.

Monsoon

marknotgeorge wrote: »

My wife was quite a high-achieving UO a few years ago. She says they certainly should be told by their UO that they are self-employed. I have heard of at least one UO being stung by the Revenue.

Can I just add that UOs and AOs are classed as self-employed. There's also downlines - a PO can become a UO by recruiting half a dozen or more new POs, budding off kind of like how hydras reproduce. Her 'mother' UO then gets a cut of that unit's sales. This can continue ad-infinitum. Cars are funded by the qualifying UO taking a reduction in her percentages.

Thanks for the info. No longer relevant to me but it's useful to know (being a geeky accountant and ex-PO it's nice to know how it all works!)

Vonni

Hi

Any sort of income, after deduction of allowable expenses, from running a part-time party plan or similar business is taxable.

However, I have had clients who have this type of income from Cambridge Counsellor/Distributor, Virgin Vie, Anne Summers etc who simply don't know this ... in some cases the level of profits have been quite substantial.

I do find it quite worrying that they are apparently not told that they are self employed -or do the individuals just not take the words 'self employed' on board because they already have a job and are employees?

There are quite a few expenses that you can offset against the income - keeping a detailed log of mileage and putting this through as an expense at 40ppm would be one of the main costs. And what about the costs of postage, stationery, mobile telephone calls and use of home allowance?

In reality by not declaring the income may lead to a Revenue enquiry - this could be triggered by someone telling the Revenue that you have this source of income! If you haven't kept records of your expenses it could be quite time consuming re-creating these yourself and additionally expensive if you have to ask an Accountant to help you.

Vonni

Rachel

I find that a lot of people that sell on ebay don't realise that they have to declare it. Then we have part-time cleaners.

In fact the amount of people that do not declare is really starting to annoy me. I looked on HMRC website for information on reporting people (just for info not actually reporting someone) and couldn't find anything just found a hotline for benefit cheats.

Sorry just climbing of my high horse.

Monsoon

Rachel wrote: »

I find that a lot of people that sell on ebay don't realise that they have to declare it. Then we have part-time cleaners.

In fact the amount of people that do not declare is really starting to annoy me. I looked on HMRC website for information on reporting people (just for info not actually reporting someone) and couldn't find anything just found a hotline for benefit cheats.

Sorry just climbing of my high horse.

There is a tax evasion hotline... let me go look

Yep, here it is:

http://www.hmrc.gov.uk/tax-evasion/index.htm

Rachel

Thanks that is very tempting!

lmiddleham

I've found that a lot of people who trade online seem to think that because the websites sort the VAT out on goods sold that they don't have to worry about tax!
Not realising income tax is the issue, not VAT.

Monsoon

lmiddleham wrote: »

I've found that a lot of people who trade online seem to think that because the websites sort the VAT out on goods sold that they don't have to worry about tax!
Not realising income tax is the issue, not VAT.

Going off on a tangent now but I didn't realise they did this. How do they do this? Can you give an example? Are you saying that for a non-VAT reg trader, the site being VAT reg has to account for VAT on the whole of the sale to the end customer? Or that the site will jsut email/ .csv the VAT registered trader the relevant info from the sales made for their VAT return?

Surely if someone is doing VAT they will know about income/corporation tax?

Or have I totally misread/misunderstood/lost the plot?

lmiddleham

I’ve never actually done the accounts for anyone on there but I’ve sold a couple of things online and I believe as well as the website deducting their own fees they also deduct something for VAT

A couple of people I know of sell online more regularly and don’t believe me when I say the should really declare their tax. They say the website sorts all their VAT out so they don’t have to worry

slackda

Sounds like the website acts as a portal for effectivly refering the sales through the parent company....shame that the company doesn't make people aware that they are laible for Taxation on any commission profits they make..

jilt

Rachel wrote: »

I find that a lot of people that sell on ebay don't realise that they have to declare it.

I take it you're referring to traders here, not for example me selling any unwanted personal items on ebay?

lmiddleham

Hi Jilt

Yes people buying for the purpose of selling. Someone just getting rid of a few unwanted items isn't classed as trading.

Monsoon

lmiddleham wrote: »

I’ve never actually done the accounts for anyone on there but I’ve sold a couple of things online and I believe as well as the website deducting their own fees they also deduct something for VAT

A couple of people I know of sell online more regularly and don’t believe me when I say the should really declare their tax. They say the website sorts all their VAT out so they don’t have to worry

Thanks.
Out of interestm, which websites?

lmiddleham

From memory, Amazon deduct a fee for the VAT out of items I’ve sold.

The traders I spoke to both trade on Ebay. I assume they’re referring to the same thing, where Ebay are taking a fee of what is being sold but I can’t vouch for that as I’ve never sold anything there

Monsoon

lmiddleham wrote: »

From memory, Amazon deduct a fee for the VAT out of items I’ve sold.

The traders I spoke to both trade on Ebay. I assume they’re referring to the same thing, where Ebay are taking a fee of what is being sold but I can’t vouch for that as I’ve never sold anything there

Surely Amazon are acting as an intermediary and only owe VAT on their own commission on the sale? Of course they will take their own cut, and that will have VAT on it, but the whole cost of the item to the end consumer shouldn't have VAT on it unless the trader selling it is VAT registered. Surely?! :huh:

Bluewednesday

That's how I saw it Monsoon, thought I had missed something else?

Vonni

The website charges, including vat, are your expenses not your income.

If you sell something say on ebay and they are your own personal effects eg. second hand clothing or household goods or unwanted gifts the income is not taxable.

But if you run this as a business to obtain additional or second income - sourcing goods free of charge or for a nominal fee or even make them yourself - you do need to declare the income after deducting the website fees.

Any VAT the website shows does not relate to your sale it relates to their costs to you.

V