6 tips for setting up an eBay business account

If you buy items to resell, make products, or sell regularly, eBay expects you to use a business account rather than a private one. A business account shows buyers your business details and gives you access to tools for professional sellers. Here are six tips to get it right.

1. Decide your business structure first

You can register as:

• a sole trader – quick and simple; you and the business are legally the same
• a limited company – a separate legal person, with limited liability for the owners

If you plan to form a company, do it before you open the eBay account. Then you can register the account in the company's name from the start, rather than changing it later. Your company name, company number and registered office will usually be needed.

2. Have your details ready

eBay will ask for information such as:

• your legal business name and type
• contact details and address
• bank account details for payouts
• identity details for the business owner or directors

eBay runs its own checks and may ask for documents, so make sure names match exactly across your company records, bank account and ID.

3. Use a business bank account

Keep eBay payouts separate from your personal money. For a limited company, the company's money must be kept separate from yours, so a business bank account is the practical choice. It also makes bookkeeping and tax returns much easier.

4. Think about which address to show

Business sellers show contact details to buyers. If you work from home, you may not want your home address on your listings or on the Companies House register. Options include:

• a Registered Office Address for your company's official address
• a virtual office or business address for trading correspondence
• a separate returns address

Check eBay's current rules on which address must be shown and where.

5. Understand your tax duties

Tax basics for online sellers

• Hobby or business? Clearing out your own unwanted things is usually not trading. Buying items to resell, or making items to sell for profit, usually is.
• Trading allowance. Individuals can earn up to £1,000 a year in gross trading income tax-free. If your gross trading income is over £1,000, you must register for Self Assessment.
• Register on time. Register for Self Assessment by 5 October after the end of the tax year in which you started trading.
• Platform reporting. Since 1 January 2024, online platforms such as Amazon and eBay must collect and report information about many of their sellers to HMRC. This does not change the tax you owe, but it means HMRC can see platform income more easily.
• VAT. You must register for VAT if your taxable turnover over the last 12 months goes over £90,000, or you expect it to go over £90,000 in the next 30 days.

6. Set up your shop properly

• Write clear return and delivery policies.
• Use consistent branding and a recognisable shop name.
• Set up templates for listings and messages to save time.
• Check eBay's current fees and any shop subscription options for your volume.
• Keep a simple stock list so you never sell what you do not have.

Common mistakes

• Opening a private account and selling as a business.
• Using a name on eBay that does not match the bank account.
• Mixing personal and business money.
• Forgetting to register with HMRC.

How Form My Company can help

Get your company in place before you register with eBay. Our Digital Package costs £290, including the £100 Companies House fee and VAT, and most companies are registered within 24 hours. Our Privacy Package adds a registered office, director service address and virtual trading address for the first year, so your home address stays private.

Frequently asked questions