Can LLR holder do online business/Previous passport damaged?

[helloyoume]

Dear Sir/Madam,

I have got 2 questions with LLR holder.

First, I am currently a Limited Leave to Remain work permit holder, sponsored by my employer. There are couple other people in the same workplace holding the same residence permit. I know one of them is selling goods for profit on ebay outside work, and he said UKBA wont bother him as long as he declares his extra income to HMRC. Will he face prosecution or deportation if UKBA do find out??

Second, I have studied and worked in the UK for over 10 years with no visa break in between. With other critiera met, I am confident that it is the right time to switch from LLR to ILR. Only few days ago I discovered that one of my old student visa (valid for 2 years) was attached to my previous passport and the worst part was my parents tore the rest of the pages away, leaving only those with that old visa, my photo/personal details and the cover. My current passport is in good condition with a 4-year student visa and a 5-year LLR visa. Will this awkward situation affect my ILR application??

Thanks!