Ebay forces upgrade to Business due to new HMRC regulations

[sportex-uk]

Hi All.

I've received an email from ebay forcing me to switch to business account due to the volume of my recent sales. Customer service explained that I exceeded £1800 in one month, so they act in line with new HMRC regulations. The email is a bit threatening: "We need you to make these changes to your account within the next 21 days. If you don’t, your selling privileges may be blocked. This includes listings ended and loss of selling history."

However, As I'm not ready to go business and I consider my increased activity as temporary, Customer Service advised that if reduce my sales volume, I can stay private. Has any of you passed through this process?

Also, what happensto your existing promo listings if you switch to business? Are they allowed to continue on promo terms and with 'no returns accepted' until they sell or end?

[ukhaberdashery]

You dont seem to know your obligations. Saying things like "With regards to returns, certain buyers prefer to spend less of their 'hard earned money' and just buy cheaper. If they wanted flexibility to try and return - they'd go elsewhere and pay more for the service.

As a business seller you have to offer returns there is no "they get it cheper and are happy"

If you dont like the return clause then stop selling...it's the law.

You then go onto say "I've had only few return requests due to sizing and I honoured all of them when people just messaged me to explain the problem." so why not offer returns and be legal and not worry.

[sportex-uk]

I wasn't business seller at that time.

[myriad*seller]

It's not up to eBay to force traders to comply with the law

It is up to the traders to ensure they were trading legally and declaring their earnings

If people get done for tax evasion, it is their own fault for failing to register

Ignorance of the law is no excuse. HMRC give out this advice for FREE

[myriad*seller]

How do you know it isn't our business?

How do you know there isn't an HMRC tax evasion investigator posting in their spare time on this board?

I hope your taxes are in order for previous tax years, as HMRC may take a look at ALL your trading history as you passed the limit within days of it being implemented. 

[potters_uk]

You may even get a trading standards official purchasing something from you just to see if it's "official" merchendise. Who knows, by the time youve finished arguing your case on here HMRC might have a nice folder on you including your excuses as to why you operate how you do.

[ukhaberdashery]

Tax is everyones business. People when people dont pay tax it means schools are less funded, less police, longer wait times, less pension money. I know none of us want to pay for it but it does have an upside.

One of the first results that came up when looking more into it on google was "Report a Tax fraud", "report a benifit fraud."

[messier44000]

Been sat on the fence reading most of the comments. For anyone thinking they may still slip 

through the net, a few years back I made an honest error / oversight  with the numbers (long story) and owed x-amount of ££s to HMRC.

Believe me, they do come looking for you (what was the film ?) if they find you owe anything.

Started with the dreaded brown letter. Called them up and spoke to a nice chap who gave 

advice to prevent such things happening again.

That is where the jovial chat ended when I was passed to accounts.

Boy, the lady took no prisoners. She wanted the money owed TODAY , and kept repeating 

this until the call ended.

Not scaremongering.  This is how it works if you get on the wrong side of HMRC.

Mine was due to human error. So think they may be a bit tougher if not, to anyone 

rushing to close their store and hiding stock in the loft.

[myriad*seller]

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@sportex-uk wrote:

I wasn't business seller at that time.

---

You WERE A business seller, but you were illegally registered as a "private seller"

Legally the buyer still had all their consumer rights, regardless of your eBay account status. They could have taken you to small claims court for refusing returns by proving your trading status to the court, very easily, using "Completed items" search on eBay

The same sales history that HMRC can see, although they will soon be able to see much further back that the public can

[ukhaberdashery]

I understand that some people may have started as private sellers and then found they could make a few extra pounds buying from boot sales etc to sell on and then it became even bigger to the point it was a good income but they were still in the private seller but feared going legit as that would mean HMRC get involved and they didn't want that yada yada yada. They could not give it up but at the same time going forward was also going to be a problem....and just ignored it and carried on hoping they'd never get caught.

My advice for people who are in this type of predicament is to stop selling now. If you want to continue selling start a new ebay business account, with a separate bank account. Start afresh. Do things legally (business account, business policies, proper tax paid) as down the line it is the only way forward if you don't want to get in trouble and want to grow your business.

But if you don't do that you'll be looking over your back all the time worrying about the taxman. And as the amount of backmoney grows so does the worry.

[sportex-uk]

Can't really believe. My question was purely about ebay account status and changes due to HMRC regulations, but not about declaration of income. I started this activity only a while ago and it overwhelmed me a bit, as my initial plan was only to fund my new trainers, so they won't cost me anything. Thanks to those who came with real advice (also in private messages) and who helped me to fix things and to switch to business account, as I was initially just afraid of this.

I had to declare on self-assessment in the past, so I know how it works and I'm already registered for SA for years. Just not sure how people here worry so much about my relationship with HMRC, as my question was not about it.

[messier44000]

My post wasn`t amied at you. 

Was more at those lurking / reading in the background who may have not fixed things

[myriad*seller]

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@sportex-uk wrote:

Can't really believe. My question was purely about ebay account status and changes due to HMRC regulations, but not about declaration of income. I started this activity only a while ago and it overwhelmed me a bit, as my initial plan was only to fund my new trainers, so they won't cost me anything. Thanks to those who came with real advice (also in private messages) and who helped me to fix things and to switch to business account, as I was initially just afraid of this.

I had to declare on self-assessment in the past, so I know how it works and I'm already registered for SA for years. Just not sure how people here worry so much about my relationship with HMRC, as my question was not about it.

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It's more that you were using a private account to evade fees, which gives you an unfair advantage over other sellers who were trading legally on a business account

HMRC can worry about your SA, sellers just want a level playing field where everyone complies with  laws and Consumer Legislation, and does not give themselves an unfair advantage by evading paying the correct listing and FV fees on listings. 

[sheba-knows-best]

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@sportex-uk wrote:

Can't really believe. My question was purely about ebay account status and changes due to HMRC regulations, but not about declaration of income. I started this activity only a while ago and it overwhelmed me a bit, as my initial plan was only to fund my new trainers, so they won't cost me anything. Thanks to those who came with real advice (also in private messages) and who helped me to fix things and to switch to business account, as I was initially just afraid of this.

I had to declare on self-assessment in the past, so I know how it works and I'm already registered for SA for years. Just not sure how people here worry so much about my relationship with HMRC, as my question was not about it.

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I too have been lurking and must admit when I saw your post I smirked and wondered what was going to happen next... I don't think you were quite aware of the hornets' nest you were walking into... initially I even wondered if it was an odd wind-up... this is an extrememly upsetting topic for a lot of people

Yes, I agree with you. I think a business can happen slow. I started on maternity leave selling my own baby paraphernalia only to start buying back for £5 (not my item, but the same) what I'd just sold for £30, and so not even having to retake the photos. I did the same with my city clothes, when I realised i was never going back to work full-time, or even from the office (other than just occasionally). So yes, I was buying to sell, but I was also mainly selling my own items. And despite working in finance, it never crossed my mind to consider whether I was a business or private seller - or even what that meant - until ebay - as ebay did back then in about 2010 - tapped me on the shoulder and told me to upgrade. So yes, I see where you are coming from, but...

Lets roll on 14 years. The impact of private sellers (the FVF discounts, the free listings)  has undoubtedly edged my business in ways I would never have expected - many of them, I feel for the better, but that is how it has worked for my business.  Other people feel strongly that private/business sellers ie YOU have actually stolen the bread from their very table, or lengthened their working life because they can't afford to retire.  This is why people are upset.  They feel that YOU and your ilk have robbed them. I feel this far less - I don't think private sellers have so much taken my business - but have, by not offering returns, and sometimes behaving unprofessionally, deterred buyers from returning to the site (but of course, business sellers can behave badly too).

All in all, I  hope I'm not speaking out of turn.  I just didn't think you understood the magnitude of what people think you have done - ie robbed them.

I would be really interested - and i mean this genuinely! - if in 2-3 months you came back and, if you are continuing to sell branded trainers - told us how you felt about the private/business seller divide then. It would be curious to see if you still didn't blame your competitors or felt selling as a business had some unexpected advantages?

[rainbowtrax]

@sheba-knows-best one of the most relevant points I've taken from reading this thread is the OP's addition of "PLEASE NOTE THIS ACCOUNT IS GOING TO CHANGE TO BUSINESS WHAT IS ASSOCIATED WITH INCREASED SALES COSTS. AS A RESULT, THE PRICE OF THIS ITEM IS GOING TO INCREASE BY CA 10% WHEN THIS AUCTION RENEWS. GRAB IT WHILE IT'S CHEAPER."  to some of their older listings.

This does give a realistic example of the scale of the monetary advantages these illegal traders have and their obvious ability to significantly undercut genuine legal business sellers. This is from fees alone and before you take account of the additional money saved by those who illegally don't accept returns. It then follows that genuine business sellers are probably not far wrong in feeling that illegal traders are stealing the bread from their table.

As you rightly point out, there is also the issue of buyers having a bad experience when wanting their legal right of a change of mind return and finding it's nigh on impossible to enforce from an illegal trader with an illegal no returns policy. If that leads to a buyer choosing not to buy from ebay again then everyone potentially loses out.

[myriad*seller]

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@sportex-uk wrote:

Hi All.

I've received an email from ebay forcing me to switch to business account due to the volume of my recent sales. Customer service explained that I exceeded £1800 in one month, so they act in line with new HMRC regulations. The email is a bit threatening: "We need you to make these changes to your account within the next 21 days. If you don’t, your selling privileges may be blocked. This includes listings ended and loss of selling history."

However, As I'm not ready to go business and I consider my increased activity as temporary, Customer Service advised that if reduce my sales volume, I can stay private. Has any of you passed through this process?

Also, what happensto your existing promo listings if you switch to business? Are they allowed to continue on promo terms and with 'no returns accepted' until they sell or end?

---

Yes, this is why sellers who operate LEGALLY hate people masquerading as private sellers to evade eBay fees and their responsibilities under Consumer Legislation 

I for one am glad that eBay are now forcing people to change to business accounts 

They literally take money from properly registered sellers 

[sportex-uk]

Thank you, you remember how it began, this is possibly a different and spontaneous path to go business than  the one executed by natural born business sellers, who either have skills to run their shop as pro from day one, or who just forgot that they might have started in a similar way and then transition happened.

With regards to your question: i already see the difference, but I don't care about them, the cake is huge enough for everyone to feed. There are customers who prefer cheap, those who agree to pay lots for pro service and those in the middle. I check prices of every item I'm going to list and I see inflated prices from shop sellers and low prices from likely private sellers. I source my items carefully and in the way that I can position myself somewhere in between. Private sellers with low prices are still a minority and they will never outgrow shops due to limited stock availability. Worst case scenario - wait a bit once their items sell and you're next. At the moment I still sympathise more with fee-dodging private sellers, rather than with those greedy sharks 'I steal from'.

[rainbowtrax]

Why would you brand them as "greedy sharks"? People are just trying to earn an honest living. As has been explained over and over, their prices will likely be higher than yours because their overheads are higher than yours because they're paying the fees that are due while you're not (as you were, obviously, I know legal trading is now being forced on you). All that legal business sellers want is a level playing field where other business sellers pay the same basic rate of fees and give the same legal rights to customers.

You're a relatively new kid on the block in all of this but many of the disgruntled business sellers have seen illegal traders like yourself who have had over a decade of unfair advantages and are still not being stopped in the way you've been. Unfortunately, over time, it all adds up to a huge difference in the selling costs incurred by two similar businesses, one trading legally and the other illegally. To you, this is just a sideline but to many legal business sellers, this is their livelihood and not a game.

Surely the greedy sharks are the illegal traders greedily grabbing all the free listings they can get and snatching every fee discount that comes their way, none of which they're actually entitled to.

Of course, the illegal traders (such as your former self) are only partially to blame. A lot of the culpability for this lies firmly at ebay's door as they have more than a decade of inactivity and even encouragement of this illegal behaviour behind them. Indeed, even as recently as this month, ebay CS have been freely giving out incorrect legal advice to illegal traders by telling them in phone calls that it's fine to trade illegally from a private seller account. You've just walked into the resulting storm that's been brewing for years and ignited it further.

[sportex-uk]

Wy sharks? Because it's just awful to hear the moaning, hostility and aggression. Private sellers will always have a ceiling and they can continuously operate 'illegal' way on the smallest scale only, if they exceed certain threshold, they either have to close, or go business. My turnover wasn't that huge until it went on ebay's radar and it appears that if you want serious income, there's no chance you can operate on a private account continuously (unless you're super smart and sell from 5 different accounts). And I can't imagine you can hide even small amount in taxes under current HMRC procedures.

[rainbowtrax]

On the contrary, there is every chance that you could have got away with it unhindered for at least the last decade. You're literally one of only a handful of sellers in the last decade who have been forced to switch to a business account (we may see this change but I won't hold my breath).

I can't speak for HMRC but, as far as ebay are concerned, there is no time limit as to how long you can trade illegally and the only threshold where any action would be taken is the VAT threshold of £85,000. There are sellers with tens of thousands of listings and over a decade of illegal trading history at those levels and ebay couldn't care less. Their CS agents tell illegal traders to carry on.

You're small fry compared to some but taking all the thousands of minor players like yourself, adding them together then adding in the major offenders as well and the overall effect is huge.

If you had been trying to run a genuine legal business on here and had put up with years of greedy sharks stealing freebies and discounts in order to undercut you and snatch as many of your potential sales as possible then, believe me, you'd probably be more than a tad fed up too and may just resort to aggressively moaning when you saw yet another illegal trader make hundreds of dummy listings to make sure they got them for free before switching to a business account. People probably had some sympathy and thought you were unaware of trading legislation at the start of this thread but, once you were up to speed, you still made sure to grab all the freebies you could before switching account types so that won't have done you any favours in the sympathy stakes.

[ukhaberdashery]

Agreed all sympathy lost all thought his comments.

Most businesses work hard and have to deal with a load of problem to get through the day. Maybe he thinks we are greedy because we charge more, but there are many reasons for that. From actually paying lots of taxes that go towards the benefit of other (health, pension, police etc) to keeping staff in jobs and making sure they have a job the day after tomorrow. Calling them greedy sharks is just naive.

The only greedy selfish people are the people who were businesses posing a private sellers keeping all the profits to themselves at the cost to others. From not giving customers their consumer right to a lot of them not declaring income.

The private seller selling their small amount were never a problem. It was dishonest trader that were the problem.

The good thing is this seems to be changing. A lot of fraud to do with income tax an VAT, seems to be getting hit at the moment which is good for everyone. More money for services whilst getting rid of the dodgy sellers.