VAT/Tax clarification from a private seller.

[macmiro_0]

Hi there,

I'd like to get some clarification please, as I'm getting mixed feedback between information on Ebay and ukgov pages. I am most likely to cross over £1000 threshold for items sold this year - I have sold 3-4 watches last tax year that came under £1000 as my understanding for tax/fees wasn't clear and as you can see, it still isn't. I am only selling watches when I want/need to and it is not my business, I do it as a hobby, it just so happened that this year, I have a more valuable ones that I want to get rid off. I have sold 3 so far and want to sell last, 4th one but its value itself is over £1000 and so I'd like to know if this "one-off" (most likely until the next year then....) cross over £1000 (maybe just little ove £2000) is going to be eligible for taxable amounts or not - from Ebay I gathered that I can sell items up to £6000 if it is not a business sale and from govuk site(s) it is saying it's £1000 within a tax year..... so which is it? I just don't want to be surprised by any attempts of tax avoidance or anything, I'd gladly pay it if I know what amount and when.

Thank you very much!

[*vyolla*]

There's no such thing as a 'hobby seller' - if you're listing your own personal items then you're a private seller, but if you're buying with the intention of re-selling then you're a business seller. 

A Business seller is someone who buys or makes items to sell on.  They need to be registered as a business to meet the requirements of UK law. They need to declare income to HMRC once they reach £1,000 worth of sales (eBay will be providing HMRC with your details anyway so it's vital to keep correct accounts for your tax return). You can obviously offset more expenses as a business seller, but can't offset any at all as a private one.  

A private seller doesn't need to complete a self assessment form.

[jckl1957 · Accepted solution]

You may not be liable to pay any tax.

If you are selling watches that you have bought for yourself, owned, used and worn, grown bored of and decided to sell, then there is no tax payable on those items.

If you are buying to sell, 'flipping' the watches you buy for a profit, and trading, then you may be liable to pay tax and should probably complete a self-assessment.

The 'trading allowance' of £1000 will only apply if you are trading.

The £6000 limit you mention is capital gains tax, not income tax and would apply to individual items, personal possession, sold for over £6000.  There are some exclusions (cars for example don;t attract CGT) but mainly the stuff you sell on Ebay will not qualify for capital gains tax.

[macmiro_0]

Hi both,

Thanks for a run-down, I don't sell with intention of flipping at all, it's like jckl said, I just sell them after getting bored of them or deciding if I actually like one or the other, so it is purely private and it's not for an extensive periods, since trying to give fair amount of time to see if I'll like the watch or not.

Thank you again, this makes everything clear, I'll keep that in mind as well for any future sells.