Hmrc reporting January 2025

[equinox-electronics]

Are we all ready for the avalanche of activity that this will bring next month on the forums.

Seems Ebay's wording at the beginning of the year on there announcement that only newly registered accounts 2024 and the rest 2025 was correct. 

Can't believe they have left it this late, but then again they know the backlash. 

[podlingsmum2007]

I have kept a day book with my sales in for several years. I had the department of work and pensions go through everything for the last few years and they were satisfied. They looked at my ebay, paypal, bank accounts, but as 5216elisabeth said above, selling your own personal items is allowed.

[magpiecorner1]

There was a furore when US sellers were asked for their tax number - every person in the US has to state such things a online sales on their tax forms anyway, and the US Government used eBay to ensure everything sold on their site was being declared.

I think the EU and UK is merely using the same strategy. 

All US taxpayers can offset their costs, and HMRC's has it's long used badges of trade to determine what is a business.  Logically, you yourself can't be a business because your selling items to give you the pleasure of ownership (as all collectors do).  If you are deemed by HMRC to be a business, unlikely but hey, and if you make a sale, not only can you offset the cost of sales, but you can also offset the cost of buying that item and also your next collectable, which could easily give you a 'business' loss.  Then we are back to the sideways offset tax that we discussed a few months ago.  

So, bring it on, you  could easily end up with a rebate if you are paying tax on earnings, savings or pensions.  Perhaps staying is the way to go, especially now it looks like even the state pension will soon be taxable.

Anyway, if they are indeed commencing reporting of existing accounts from January 2025, no one at HMRC will be able to make head nor tail of the figures until, 2027, as 2025 covers two tax years and reporting of 25/26 sales by self assessment isn't due until 31 January 2027.

[equinox-electronics]

Found this quote on a new document on hmrc website today..

Extended time limits for due diligence on pre-existing sellers

When you first become a reporting platform operator, you have until the end of the second year to complete due diligence for pre-existing sellers, who are those who have been registered on your platform before you had to start reporting.

This gives you an extra year to collect and verify information for pre-existing sellers. 

If you do this, you’ll need to add a reporting notification in the online reporting service to tell HMRC.

For example, if a platform operator becomes subject to the reporting rules on 1 July 2024, its first reportable period is 2024.

The date by which it must complete due diligence is:

• 31 December 2024 for sellers who registered on or after 1 July 2024
• 31 December 2025 for sellers who registered before 1 July 2024

So it seems us existing sellers won't get data reported until 2026??

[555njp]

Wow, interesting however the .gov.uk site still says by end of Jan 2025.

https://www.gov.uk/government/news/information-for-online-sellers#:~:text=There%20is%20no%20new%20ta....

Document dated Dec 4th.

I’m guessing HMRC are not staffed up yet to deal with the added workload this will generate, even though they’ve known for over a year.

Surprised HMRC can make that call too as it’s a multi-national agreement.

[equinox-electronics]

The document I found on the hmrc website was dated today (30th)

[anthonys-stamps]

Whilst selling assets rather than creating income the capital gains tax rules sill apply. The only question I have is that if Ebay declares information to HMRC surely the "customer/client" is entitled to know when and what information has been declared.  There seems to be no mention of this.

[papso22]

Indeed they do have to make that information available to the member, by law.

It's only new accounts opened last year that are being reported this year so perhaps one of those members could confirm what they got?

[wildduck24]

I am extremely confused.  I have soldthe entire contents of my 2 sheds.  I moved from a  4 bed house to a 1 and I accumulated a mountain of items over 40 years if marriage, not a thrower but a storer .  No item was over a £100 but over time I have sold approx £16000 of my own belongings.  I have expenses in this postal costs, packaging, petrol etc and I had to hire a storage unit ad my sheds were taking in water.  So probably in all I made around £7000 from my belongings which paid for the ever increasing cost of living.  Do I have to declare this and from what date to what date as ebay have asked for my national insurance number.  I have sold clothes, jewellery, watches, toys, home decor, ornaments both new and old as bought them and never come out of the box.  Thank you.

[555njp]

No, because as you said, you are selling off personal belongings which anyone is allowed to do. HMRC are not interested in that, there is no tax liability for personal belongings.

The law for reporting selling activities of individual sellers changed last year though. HMRC now require ALL online selling platforms to report to them anyone who has sold more than 30 items of approx £1740 worth of goods (personal or otherwise). That is why they want your NI number and over the coming months every online seller will be asked to provide theirs.

The law change is a collaboration between 30+ countries to help combat money laundering and stop deliberate tax evasion and benefit fraud (I.e. catch out people who are buying to sell (operating a business) but not declaring their income, and or those making undeclared income from trading online whilst claiming say en employment benefit.

Obviously I’ve simplified the analogy as each case can be very complex and each individual’s tax position cannot be easily assessed without seeing the whole picture, but basically that’s why HMRC are receiving selling data.

Now, the next question is what do HMRC do with data?

The normal approach is to analysis the data for an individual sent from all online platforms. A copy of what eBay send to HMRC should also be sent to you.

HMRC will decide if they think your selling activity needs further investigation (I.e. if the data suggests someone could be running a business but there is no self-assessment on file).

Just my assumption now but I’d hope they would see from your sales that you have been clearing out your own stuff.
There are usually patterns for them to make that call, the most obvious is that someone clearing out wouldn’t normally keep replenishing their ‘stock’ as once an item sells, why would they have several more of the same to offer? This is especially true of new items but of course never that simple as people also collect all manner of things or buy stuff for hobbies then get bored and sell it all on. So it’s rarely an obvious decision.

If they think your activity needs an explanation, the first thing they do is send you a letter basically asking for you to explain your selling activity and at the same time they can also ask you to provide selling data from online platforms going back several years.

Providing you’ve been completely honest, you shouldn’t hear back, but I’m going to post below separately an example that has just happened to my mate’s wife (as I’m aware I’ve gone on a bit!).

[wildduck24]

Thank you that has helped a lot but please do go on as I can’t see what has
happened to your mates wife. I have been selling for a couple of years but
it’s from 2 previous 4 bed houses and 40 years of me not wanting to get rid
of it. I haven’t been self employed for a lonnngggg time. All the stuff
I sell is mine. I might have bought it, not liked it and sold it but not
for profit. Most times I lose money. I have accumulated Pandora jewellery
beyond measure and now have practically sold it all from rings to bracelets
to necklaces. I have just sold some health span supplements of which I had
8 boxes and I stopped taking them so sold them and made a loss. So yes I
am confused. I will wait to see if they contact me. I haven’t kept
records as it’s my stuff. Thank you Janet

[555njp]

OK, for anyone that’s interested, this happened to my mate’s wife at the end of last year.

She was selling off her own unwanted clothes on Vinted for the last few years, maybe 30-40 items a year. 
A friend of hers had got divorced and was left with a huge pile of his wife’s clothes which he didn’t know what to do with so my mate’s wife offered to sell them on Vinted for him and split the money. It took her almost the whole of last year and at times she had 200 items for sale at once, a good few were unworn items, still with tags.

She finished selling everything around September and after fees etc. her half of the money was around £800-£900.

In November she received a letter from HMRC asking her to explain her selling activity on Vinted so she was honest and said exactly what she’d done.
This must have rung an alarm bell as HMRC followed up with a second letter requesting her Vinted account data going back to when she opened it (4 years) and any receipts she had for items she’d sold (as many were new, we think they were looking for dates rather than value to see if she was buying to sell?).
Obviously she didn’t buy the stuff so couldn’t provide receipts, this time she rang them to explain what happened.

Now they’ve written again asking for her bank and credit card statements going back 5 years which she’s provided. It’s been quiet since, so she’s hoping that will be the end of it?

They must have spotted the sudden increase in sales and lots of new stuff thinking she’d started a business?

To be honest I was surprised they were interested in her activity given her total sales on Vinted was under £3000. Even if she was trading (she wasn’t) the tax liability would be a few hundred quid at most.
She’s retired, gets state pension only, doesn’t claim any benefits and doesn’t sell anywhere else. Perhaps they think her friend was using her to launder money from stolen goods? Who knows?

I’ll report back if anymore comes of it.

[wildduck24]

Thank you so much. Just read Martins money too and according to that I am
not a trader which I am not . I don’t have receipts for all my old stuff
or any new stuff that I bought never wore or never used. I am a pensioner
too and gave an absolute mountain of unwanted goods which the charity shops
are now going to benefit from. I can’t deal with the stress.

[555njp]

HMRC shouldn’t bother you but if they do just be honest with them.

They seem to write to people asking them to confirm their selling activities were the disposal of personal belongs and not sold in the course of a business.
You sign the letter, return it and hopefully that’s that.

Nothing has changed regarding tax liabilities or badges of trade etc. it’s just that now everyone’s online selling data is provided to HMRC directly rather than them having to go looking.

I thought the thresholds for any kind of follow up (even the nudge letters) would be far higher though. I guess we’ll see as more and more data gets reported. It’s supposed to only be new accounts reported this year with historical accounts starting next year.
I think Vinted and possibly ETSY have been more upfront in providing sales details though so far.

[wildduck24]

Ahhh ok gets a bit scary when you appear to be being accused of something
you haven’t done. I was just getting rid of stuff and trying to make
room. Gone from 5 bedrooms to 4 with garages and now a one no garage.
You can imagine how much I accumulated. I have had to pay for a storage
unit as well as having 2 very large sheds. Thank you for your help really
appreciated .

[jow1995]

Unless you paid cash for the Pandora, bank /credit card statements will be proof of purchase.  

[wildduck24]

They won’t as some are like 25 - 30 years old don’t even have the same bank
now, have changed many times and don’t have credit cards.Dont keep records
for that amount of time and 90% were gifts.

[jow1995]

That my complicate things, looking at your sold items for last year, cant see there being  a problem with the clothes sales.

But with over 30 new Bra sold, and more listed for sale may raise a few questions.

[storme30]

Glad you raised the NINO  issue only a matter of time before Musk buys ebay then he'll have access to the sort of data I only share with my bank/HMRC