Government tax clamp down - is it fair?

[elizsh1527]

I saw that HMRC will be clamping down on sellers who make more than £1,000 a year from selling on Ebay, Vinted, Depop etc

Do you think it is fair? Will anyone look into alternatives. Are there any? 

[bravergrace]

I did see some reports about this over Christmas, and to be honest, some of them were scaremongering.    You don't necessarily need to pay tax just because you sell more than £1000-worth of stuff on eBay.  For instance, suppose you sold your family car for £2000, you wouldn't need to pay tax on that.  So if the tax office asked about it, you could explain it was your own family car, and show them the receipts from when you bought it for £3000 a few years ago.  The same applies if you sell your old phone or clothes or furniture - you don't need to pay tax on it, just keep the original receipts in case HMRC ever ask about it.

But some people are really running a business on eBay.  They buy or make stuff to sell at a profit - just like ordinary shopkeepers.  My local butcher wouldn't be allowed to tell the tax office "I'm not running a business here.  I'm just selling off some sausages and pork chops I had left over from Sunday lunch, so I don't need to pay taxes."     

I think it's fair for HMRC to chase up the people who are running a business but pretending not to - whether it's online or not.  

People who cheat on their taxes should be caught and made to pay the same as honest people.  I think that's fair, don't you?

[four_mid_able]

I think it's more than fair if it were directed 100% at the right seller's.

BUT ,i don't see that happening at all.

[exponential_developments]

This is an international agreement, not a UK government idea.

[bravergrace]

The information being given to HMRC - name, address, number of sales, sales area, gross takings (and possibly at a later date bank account details) - should be enough to let HMRC easily identify certain types of unregistered business sellers:

- those with multiple accounts to keep them below the eBay threshold for action

- those with suspiciously high sales (more than the average person's annual salary, or selling dozens of washing machines or motor vehicles in a year)

- those with improbable quantities of stuff (hundreds of pairs of new shoes, thousands of bottles of perfume, pallets of electricals, dozens of designer coats).

I would guess that simply collating the information by address and postcode would give enough information for HMRC to be able to sort out the worst offenders, without needing to trouble themselves about old Alfie selling off his late wife's collection of Victorian crested china.

[btr.style]

It's not "make" as in profit. It's total turnover. I.e have £500 in stock, sell for £500 profit so you've taken 1k and that's your 1k traders allowance (eBay fees will then be around £150, postage maybe £100, less £500 stock cost, so even though someone has only made £250 profit, they've still accumulated £1000 turnover). 

The concept is simple..... Abide by the law. That's how it's always been so nothing new there. 

All it means is HMRC will be looking into things further. If someone is adhering to the law, nothing will be any different. They won't punish people who are doing the right thing. 

It's a bit like saying if someone is driving under the speed limit, the police won't stop them and that's expected. If someone is speeding then they could/will be stopped by the police and rightfully so. 

[magpiecorner1]

There is no clampdown and the £1000 is a threshold to REDUCE the number of self employed businesses making self-assessment returns.

EBay is already sending the information, HMRC has merely made it mandatory.  It will make checks for VAT regulations easier and Airbnb folk might want to be a tad concerned.

Other than that, same old same old.  

[superchallenge]

The current situation is this:-

Hypothetical Ron Smith is registered as a Business Seller, and spends 40 hours a week "thrifting" at the car boot sales and charity shops and pulls in £1,500 of profit a month. His business is classed as a business and he has declared his income, so he pays tax on the income.

Hypothetical Bob Jones is registered as a Private Seller, and spends 40 hours a week "thrifting" at the car boot sales and charity shops and pulls in £1,500 of profit a month. His business is classed as a "side-hustle" because FOR SOME REASON he didn't feel like calling it a business, so he doesn't pay any tax on the income.

In short, yes, it's entirely fair.

I'm sure some perfectly innocent private sellers who somehow "get rid of" several grand of items they "no longer want" each year will get caught up in this and that's a shame.

But alternative platforms for people running businesses aren't required (not for this reason, anyway.) If you can't afford to pay the taxes, then your business isn't viable.

[wyntersemporium]

Should also be made to change from private to a business too. Seeing loads in the costume jewellery section. I have 980 listings up as a business. Saw on private person with well over 2000 items all new stock 

[carbtec]

I see it as a media campaign, I doubt that HMRC have put any resources in place to follow it through.

[notstopbuying]

I believe HMRC stated sometime like 34 million to fund the scheme and 24 full time staff. 

[nebs9999]

If eBay are allowing business sellers to masquerade as private individuals, and thereby avoid showing their name and address, not accept returns, and avoid taxes, then ebay are guilty of money laundering and the scale of the problem suggests ebays fine will be massive.

[notstopbuying]

There is likely to be sellers who pay all the their taxes, register for self assessment and conform for tax purposes, but on eBay choose to be registered as a private account.... Perhaps one reason could be, they sell via delivery only, work from home, and do not want their address targeted, especially if selling fairly expensive items, a burglary could easy see the stock at the house and target them.

With regards to the distance selling regulations, I guess if a private seller offers a returns policy on all goods, then other than not showing their home address, how many real differences are there? 

[btr.style]

No not at all. I'll tell you the reason and I'm sure others will agree too....Money!!!

On a private account they get 1000 free listings a month (business accounts get none and to get discounted listings have to pay for a shop subscription). Every 2 weeks private accounts get fee promos for 100 listings with 80% off fees. There's also no VAT added to eBay's fees so even at full fees, business sellers pay more.  As I mentioned in another post, we pay £10,000 more in eBay fees a year (plus shop and excess lisiting fees) than someone with the same turnover on a private account using the fee promos. 

Sure, some may also not want their address public but that's an additional reason. They could use a virtual address anyway so to not show their real address. 

More real differences than you realise. The ability to undercut other businesses has a massive impact on many things. Business accounts pay more in fees so have to do more sales to claw that back, perhaps even employing staff. With businesses on private accounts undercutting them due to the fee promo, it reduces that legit businesses turnover and could put jobs on the line. It gives them a competitive edge. 

There's no legal avenue for complaints with no address showing. Buyers have much less rights, or moreso the ability to apply these rights. 

Any private seller, even if showing returns one day can decide not to accept returns anymore and change listings to no returns. 

It allows the market to become saturated. Anyone can set up a private account and get the fee promos which are lucrative (around £3 fees per £100 in sales, compared to around £15 for business sellers on full fees). As it's so easy to gain this edge, more people will be tempted to give it a go and the likelihood of too many of 1 item and not enough interested buyers becomes likely (with legit business sellers losing out by being undercut). 

On that note of saturation. Private fee promos aren't for multi listings, so you'll see private business sellers listing many of the same item individually with the text slightly changed to bypass eBay's dupe listing policy. This floods search results with many of their listings. 

 I could go on. It's bad all round.

[simplyessential_uk]

Do you think it is fair? Will anyone look into alternatives. Are there any? 

Yes its fair and are you asking if there are alternative ways of avoiding paying tax on earning?😄🤣

[tech-tonix]

"Are you feeling lucky" - that's the paranoid in me, & why (amongst other reasons, both pragmatic & even moral) I always declared, from the get-go. "They can afford the most expenive lawyers"

[carbtec]

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@notstopbuying wrote:

I believe HMRC stated sometime like 34 million to fund the scheme and 24 full time staff. 

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So £1.4millions each staffer?

Sounds about right for such utter nonsense. How many of us 'seasoned' veterans have experienced this sort of campaign from our beloved HMRC in the past?

[gothicrosegallery]

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@bravergrace wrote:

The information being given to HMRC - name, address, number of sales, sales area, gross takings (and possibly at a later date bank account details) - should be enough to let HMRC easily identify certain types of unregistered business sellers:

- those with multiple accounts to keep them below the eBay threshold for action

- those with suspiciously high sales (more than the average person's annual salary, or selling dozens of washing machines or motor vehicles in a year)

- those with improbable quantities of stuff (hundreds of pairs of new shoes, thousands of bottles of perfume, pallets of electricals, dozens of designer coats).

I would guess that simply collating the information by address and postcode would give enough information for HMRC to be able to sort out the worst offenders, without needing to trouble themselves about old Alfie selling off his late wife's collection of Victorian crested china.

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Then you don't know HMRC at all!

They'll go after anyone who isn't a millionaire, the small fry are easier targets, including grandad selling his late wife's collectables to pay for her funeral.

[papso22]

Nonsense!  That's pure scaremongering.  HMRC target theor resurces according to risk.  They have to bring in yield (tax)  and that is not done by getting £100's here are there.  It takes the same resources to deal with large and small sellers, so they won't waste them on small fry.

[floral.lines.supplies]

https://www.channel4.com/news/factcheck/factcheck-do-you-have-to-pay-tax-for-selling-secondhand-on-v...