HELP! Obvious business seller operating on a private account!

[cocooncards]

I hate having to do this but there is a business seller operating on a private account in my category (I'm posting this on a throwaway just FYI). He's already made like a grand in a day (NO FEES!). I tried to report but the old system is gone and the new one doesn't appear to have "fee avoidance" (or similar) as an option, as far as I can tell. 

I was under the impression that all the new rules (simple delivery, BFP, selling limits etc.) were supposed to stop PRECISELY THIS from occurring!

[spence0175]

But what are the incentives to switch to business..none really…they are just opening new private selling accounts.

Should be making the business selling accounts more lucrative

[therenewalworkshopltd]

Not that I am against them making business accounts better, but.....

Why exactly should there be an incentive, when it is a legal requirement?
You are literally breaking the law, when selling as a business, using a private account.
That to my mind, is a pretty good incentive!

[jonatjonatjonat]

The law of course is only good if it’s actually enforced.

[therenewalworkshopltd]

Don't be ridiculous.
That's like saying it's ok to steal sweets from a shop because you won't get caught!

The law is the law, whether it's enforced or not makes no difference whatsoever.

Aside from which, with the reporting of earnings, many of these will get caught, unless they are canny enough to adding them to their tax return.
But even so, just because there is no clampdown at the moment, does not mean that there won't be next month, in 6/12 months etc.  Nobody actually knows this.
And if there is, these people face at a minimum fines, which can at the top end of the scale end up with prison sentences.

But it still doesn't mean that there should be sweeteners to stop people from breaking the law!

[the_book_seekers]

Existing business sellers wouldn't see it as sweeteners, more of a tipping of the balance. ebay suggested that simple delivery and the buyer protection fee would make for a more level playing field but that hasn't happened.  All that has happened is private sellers are hacked off and businesses operating on private accounts have adapted and the numbers seem to be increasing. Perhaps it is time ebay made having a business account more attractive rather than less.

[spence0175]

Yes I agree. 
This topic is so much becoming a Groundhog Day conversation. No matter how many times it is said, we know it’s a legal requirement but sadly not enforced. Some people know, but there are people who do not know it’s a legal requirement and who is going to set out to prove that someone is business when they are trading as private. It’s become a total minefield.

TBH if I was newish to selling, there would be no way I would  become a BS whether it was the law or not. There is no appeal or incentive especially financially and in this current economic climate I suspect the latter would be a deciding factor. If it’s free to sell you have nothing to lose….

[the_book_seekers]

When ebay introduced business accounts, way back when, there were better terms for them and not a short term deal of 3 months free shop subscription. ebay could improve the number of listings in shop subscriptions and not raise the fees, but it has got itself in to a position where  the only real way to redress the balance would be to cut the number of listings given to private sellers and/or stop the roll up each month. Having hacked the genuine private sellers off with SD and BPF that's going to be a hard ask. 

[notimpressedatall]

Everyone shares their opinion what eBay should do like they do not know that... The answer is simple - they do not care and it works for them!

[spence0175]

Yes do you remember the days when there were 10% off fees for BS without terms, when  becoming a BS was a pretty normal thing. Then they bought t&cs like had to offer, free postage, special delivery and long return dates in order to get those discounts...  I think that was the start of the decline..

[pillarboxred]

It's standard practice in the City of London for businesses to "shop" competitors who are evading rules to HMRC. If you have correct facts, go ahead. This sort of deceptive trading is a public issue, it's not just between the seller and eBay: consumers need to know the entity they are buying from as it affects their rights.

[spence0175]

But who is it down to, to police the site.  Many report to eBay but who can actually report a person to HMRC  if they dont know their name and address

[moonlight-rhapsody]

"who can actually report a person to HMRC if they dont know their name and address"

It seems anyone can, and apparently it's very easy to do, just by filling in a form on the HMRC web site.  If HMRC then want to investigate the identity of a username, they can easily get this from ebay.  Actually HMRC have probably already got ebay equivalent names on their database. 

What nobody except HMRC knows, is whether the seller is already reporting their earnings to HMRC as the fact that they are a private seller alias a business on ebay doesn't automatically mean that they're not declaring profits.  But if you feel strongly enough, it's worth asking HMRC to check them out.  

Do a Google search for "can individuals report ebay sellers to HMRC" and AI will give you loads of information (which may or may not be accurate but it looks pretty accurate at first glance).

[4_bathrooms]

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@spence0175 wrote:

But who is it down to, to police the site.  Many report to eBay but who can actually report a person to HMRC  if they dont know their name and address

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HMRC are not responsible for policing consumer law; that is Trading Standards' job. HMRC already have access to all eBay UK's sellers' data including their sales history and contact information - they have had such access since around 2015. This isn't an issue about whether such sellers are declaring their income or not - I would posit the vast majority of such sellers are declaring their income correctly.

However, Trading Standards are too underfunded and understaffed to care about traders masquerading as private sellers on eBay. Things will only change if there is a change in the law that holds eBay responsible for ensuring traders are correctly registered as eBay only police their own platform when obliged to by legislation. I had hoped the Digital Markets, Competition and Consumers Act would be that legislation but where this issue is concerned it simply stated the offence as it appeared in the Consumer Protection from Unfair Trading Regulations. As nobody is actually policing that paragraph nothing has changed nor will it. 

[moonlight-rhapsody]

"I would posit the vast majority of such sellers are declaring their income correctly."

I'm just wondering what makes you think that?  I only ask because when the issue of ebay reporting National Insurance numbers cropped up on numerous threads back in the summer, the feeling was that there would be huge swathes of people caught out for evading tax on their ebay income.

[pillarboxred]

 English people think we Scots unfairly get away with things but, honest, we don't, try as we might.  "Scot free" doesn't need a capital  except at the start of a sentence because it has nothing to do with Scots or Scotland. It means "hit/smite/smack/strike" as in "scotching a snake".

[bojangled]

See my issue isn’t really with the HMRC reporting. 
It’s the fact these incorrectly registered sellers are listing for free, have accumulated shops full of 2 - 3,000 brand new items, then come on the boards whinging about SD and BPF. Deny consumer rights and don’t adhere to to DSR. (Been 2 ‘hobby and private’ individuals on certain threads this morning)

When it costs a featured shop business seller over  £92.40 to create that set up. 
It stinks.  It’s down to eBay to get that bit right, and the onboarding process for opening a shop clearly doesn’t detail business/private requirements. 

[4_bathrooms]

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@moonlight-rhapsody wrote:

"I would posit the vast majority of such sellers are declaring their income correctly."

I'm just wondering what makes you think that? 

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HMRC have been sending out one-to-many (aka "nudge") letters ever since Connect became fully operational. These letters are sent automatically to anyone HMRC detects as having undeclared, taxable income. They seem to go out in bulk once every four years or so on average but they took a noticeable break during Covid. You can Google "ebay hmrc letter" to see examples.  

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@moonlight-rhapsody wrote:

I only ask because when the issue of ebay reporting National Insurance numbers cropped up on numerous threads back in the summer, the feeling was that there would be huge swathes of people caught out for evading tax on their ebay income.

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Most of the posts that I remember were from (genuine) private sellers worried they would be charged tax on their private sales despite that not being the case - the sensationalist media hype at the time didn't help. I also remember a smaller number who didn't believe they were businesses and as they were already paying tax through their UTRs on their "hobby sales" were demanding to know why they were now going to be required to hand their NINOs over to eBay. I don't remember many posts from people who should have been declaring their eBay income but didn't realise their eBay selling activities constituted trading.

There are always some who don't realise their selling activities constitute trading - part of the problem is eBay failing to make it clear during account registration when a business account is required. The account creation form has "Private" pre-selected and is easily missed. Also, eBay allows private sellers to have a "shop" which to someone not familiar with consumer law would create the impression of being the correct way to signal their trading intent. The first stage of the account creation process should be a quick questionnaire or should at the very least present two clearly distinct options for private and business account creation one of which has to be consciously chosen. It should be made clear from the outset that "you need a business account if you buy items to resell or if you make, grow or repair items with the intention of selling them" and "you should choose a private account if you are selling your unwanted personal possessions".    

[4_bathrooms]

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@4_bathrooms wrote:

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@moonlight-rhapsody wrote:

"I would posit the vast majority of such sellers are declaring their income correctly."

I'm just wondering what makes you think that? 

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HMRC have been sending out one-to-many (aka "nudge") letters ever since Connect became fully operational. These letters are sent automatically to anyone HMRC detects as having undeclared, taxable income.  

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Just to clarify the above I should have said "These letters are sent automatically to anyone HMRC suspects of having undeclared, taxable income." 

A nudge letter is not a demand for payment; it is a request for the recipient to clarify their tax position (or else). 

[jlovie]

I saw a news story recently saying Vinted are now requesting NI details once sellers sell a certain amount.

[jonatjonatjonat]

https://www.bbc.co.uk/news/articles/c0mxe7l7wp1o

As should all Marketplaces where payments are being processed. ebay do. Airbnb are required to do so. etc.