Business - But NO IDEA

[PAN007]

Hello,
First I apologies if I am attempting to write this on the wrong forum but I am sure there are many of us that just have no clue.
I am currently employed full time and want to set up a small business to help my Daughter

We want to sell personalized sweets on Ebay, We are not VAT or business registered yet and don't know what to do, the problem we have is the margins are so small but VAT and then TAX is high.
The cost of the items used is small ish, for 20 it is £1.21, the postage is £1.24. Then Ebay and paypal fees is 77p, therefore total cost is £3.22.
We then sell for £4.96 leaving £1.74 profit (35%)
This is good
If we then take off 20% VAT from the Selling price, 99p and say 25% of the PROFIT for tax, 35p leaves 40p true profit which just doesn't see right.
Obviously we could claim back the VAT on the sweets, paper, not sure about postage but still doesn't seem much.
Maybe I am writing this in the wrong place but any advice would be welcome
Best Wishes
Paul

[bd6759]

Don't worry about VAT. You need to be selling over £77.000 worth of sweets each year before it become mandatory. Ignore it completely. You don't charge it and don't reclaim it.

Your profits are liable to income tax, but as long as your daughter does not have any other income she would need to have profits over £10,000 before tax becomes an issue. If you think that the business will be that successful there are many new business courses being run that you would find invaluable.

[section 44]

...£81,000