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? 

[returns_andexdisplay]

But a year later the same account is still trading as private seller even though they are clearly a business seller. Or they open up another account

[rainbowtrax]

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@papso22 wrote:

The rules do not name individual providers of digital platforms, but they do define digital platforms as follows:

1. Section I(A)(1) of the Model Rules shall be amended as follows:
A “Platform” means any software, including a website or a part thereof and applications, including
mobile applications, accessible by users and allowing Sellers to be connected to other users for the
provision of Relevant Services or the sale of Goods , directly or indirectly, to such users. The operations
of the Platform may also include the collection and payment of Consideration in respect of Relevant
Activities. The term Platform does not include software exclusively allowing the:
a) processing of payments in relation to Relevant Activities;
b) listing or advertising in relation to Relevant Activities; or
c) redirecting or transferring of users to a Platform
without any further intervention in the provision of Relevant Services or the sale of Goods.

I would say that includes Facebook accounts.

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So, thinking about this, does it include Facebook Marketplace listings but not listings on closed Facebook selling groups like local area selling or groups for selling certain types of collectable? Or are they included too?

[the_book_seekers]

I would've thought that any selling via online sites would be included. Auction houses with internet sales have got to be in there as well, but I'm not sure how as a sellers activities could be so fragmented across several firms. Might be a loophole in there somewhere.

[papso22]

Whatever it means for Facebook, and on the face of it the rules seem to cover all sales however made, I think they will have a massive compliance problem.

[theelench]

It does seem that Tax is becoming progressively more unfair instead of "progressive" meaning that the more you earned, the more you paid.

The govt. seem to have persuaded most people that anyone receiving any type of benefit is more than likely to be cheating and needs investigating.  Now, those well known fraudsters, (OAPs) will have their bank accounts investigated.

Anyone selling a couple of old frocks or a few collectables is suspected of being an international money launderer as a side-hustle is now in the firing line.

The govt. is so desperate to get every penny it's owed it will spend millions hunting down every pound due from those who have to decide whether to Heat or Eat.  While turning a blind-eye and keeping very, very quiet about the blatant unfairness of billion $/£ corporations paying almost nothing.

[mcr20design]

I wonder how this will affect chinese sellers with a UK dropshipper address? Ive bought stuff from sellers with UK addresses on the listing but in the event of having to message about an issue or return, the response is always received during the night so its clearly not a UK GMT timezone and the message is not fluent english. So who would HMRC be interested in with that? Does the drop shipper receive the funds for the sale or the seller in China?

[jow1995]

pretty sure these rougue traders will not be keen to enter their National Insurance numbers, this is the biggest shake up in ebays history. My guess is there will be 1000s of accounts closed down very soon. 

[floral.lines.supplies]

Yes, 100% fair.

[susapric-68]

It's not ebay that will be reporting the money, got told by someone who works in the tax office that it will be the banks that will report the payment going into your account. They are after the benefit crowd

[susapric-68]

They already have. The bank will be reporting to them not ebay. HMRC will then check to see if anyone registered on the bank account is registered with them. If they find the person on the account is registered with them then nothing happen and they move on to the next person. They are mainly looking for benefit claimers running side hustles

[rainbowtrax]

No, the new legislation is that digital platforms themselves have to report the sales. Ebay have already stated that they will be taking NI numbers from sellers in order to submit sales details to HMRC, for them to match the NI number to the person, once you hit one of the thresholds. See here: UK digital sales reporting | eBay

[papso22]

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@susapric-68 wrote:

It's not ebay that will be reporting the money, got told by someone who works in the tax office that it will be the banks that will report the payment going into your account. They are after the benefit crowd

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HMRC only has the right to ask banks for data in very specific circumstances.  You were misinformed by the 'person in the tax office'. 

HMRC are not after anyone in any particular sector, they are after people who are not accounting for the right amount of income tax.  if that includes people on benefits, then another government department will get involved too.

[susapric-68]

Yet they have already set this up "Automatic Exchange of Financial Account Information (AEOI)" looks like you're missinformed. So a system is already in place to gather info. would just need to tweek that a little as at the moment they don't collect info in the uk from a person born here, but they could. anyone not sure should stop taking advice from the internet and contact the HMRC. You have untill Jan next year, don't get caught or they will investigate further back to see how long you have not declare it

[leadhills_scot]

So are you saying that the BBC, the head of Vinted in the UK, ebay and the money saving expert site have all got it wrong?

[susapric-68]

None of them have said anything about the bank, what i said was there's a system in place already to gather bank info. What would be easier, get reports from all these places and then chase up the bank or get the bank info at the same time and match them up. Online selling places will just report what you sold, you're allowed to sell your old clothes. Your bank would show if you sold your own old clothes or paid for them in bulk. Phone the HMRC. All info on the net is about online platforms responsibility to report the sales and nothing else, only the HMRC know what they will do after. 

[papso22]

What you said was that the bank would be reporting this information and not ebay.  This is wrong and why there is no-one saying that on the internet, or on these forums (apart from you). 

"It's not ebay that will be reporting the money, got told by someone who works in the tax office that it will be the banks that will report the payment going into your account. They are after the benefit crowd"

[pillarboxred]

I received an email from HMRC yesterday which talked about the stories in the press: the stories are scaremongering and nothing has changed. 

Have you another account? Having made six purchases from five sellers on this account, you have zero tax liability.

If you keep a careful record of the prices you pay for  stock items, packing materials, photography, postage, etc, etc. and your eBay and banking fees  the tax won't be large unless you have made a lot of money.

I think the new eBay reporting system will catch some of those who evade tax. I suspect a lot of folk are needlessly worried because they don't keep proper records and think they are making more than they really are.

[susapric-68]

As you could not be bothered to phone them i did for you, no need to thank me.

I missheard him and you're right online platforms will be giving the info, but so is the bank. Maybe you could answer this question as i couldn't but what happens when people sell up to £1k (£1,725 depends on what total the platform is using) then stop before giving UTR NINO and make a new account and does the same on all other platforms then keeps repeating that? well none would be reported and there seems to be a big hole in the plan to clamp down on this. Ouch. Now if only someone could come up with an idea to use a system already in place and have the banks report incoming payments from all platforms once a year.

Sorry if the banks reporting it is upsetting you

[papso22]

I don't think I will answer a question that involves fraudulent activity.

Why should I thank you?  Shouldn't you be apologising for misleading posts?

[susapric-68]

I thought you had all the answers. Not missleading, said the bank will be reporting incomings and i was right. Missheard about companies will also be reporting it, but the main info the tax office will be using will be your bank details becuase that will show all the £1700 you earnt from all the different online companies.