Upgrade to a Business Ultimatum

[tibe-9422]

Yes this is a complaint post!

I am jumping on the various HMRC business account posts. Maybe it will be helpful to someone. 

I get tired of seeing people blindly supporting eBay, just as I get tired of dealing with the platform itself. It's disheartening to see so many receiving the dreaded message demanding an upgrade to a business account for tax purposes and then scrambling for advice on how to handle it.

Let them seek advice, even if they haven't done everything perfectly. I know it may seem like I'm using the what-about-ism technique, but it's necessary in this situation. These individuals are not the ones who asked for a bailout like the banking industry. They don't have connections in high places of government or legal counsel. Often, they are just struggling to make ends meet and trying to make a little extra money by selling things online.

We don't have to justify their actions, but it's important to understand where they're coming from. For many people, this money isn't going towards buying a private island or evading taxes. It's simply helping them survive. Maybe they didn't know they needed to register, or maybe they did but couldn't afford to do it officially, or maybe the amount was small and they had bills and debt to pay off. This doesn't make it right, but it also doesn't make it entirely wrong either. When the threshold for reporting income is £1750 per year to HMRC, that seems very unfair. It may be within the bounds of legality, but it certainly isn't ethical.

Are we promoting entrepreneurship or encouraging people to remain in traditional jobs? Let me rephrase that, and the critics will jump on it: for most individuals, it's not feasible to turn a small profit into a legitimate business. With expenses like overhead costs, selling fees, postage, dealing with buyer remorse and returns (whether legitimate or not), not to mention taxes taking a quarter of their earnings! The list goes on and on. I know some might say - if you can't afford it, don't do business, right? So here's alternative B: they work for large corporations who have mastered the art of evading taxes and keeping money out of the hands of everyday people. These companies find clever ways to increase profits for shareholders, while also indulging in luxuries like yachts, second and third homes, and offshore accounts. Sounds like I'm trying to balance the scales here? I couldn’t begin to balance those scales. The scale is too unfathomable for us lay people. Soon there are no small businesses, only corporate entities with the power to afford a business. I see posts so often with people saying 'if you can't afford your business, you shouldn't be in business'. I disagree wholeheartedly because I never want to see the day where only those who can afford, are able. That isn't a good power structure. It won't be sustainable. It would be frightening as to how it would sustain itself.

So yes, ethically speaking, I align with those individuals who make £5000 on eBay without reporting it because it supports the idea of entrepreneurship. And yes, it helps people who are usually making small salaries and paying taxes with a little bit of cushion to pay higher food, utilities, cost of living expenses that have exceeded, by far, any wage increases in decades. And shame on HMRC for going after small money when there are bigger fish out there scamming us regularly and getting away with it. It's time to step up and speak out about these issues.

eBay should have informed their sellers much earlier, giving them time to make informed decisions about their business's future. Some sellers may have seen the numbers and realized they couldn't make it work, choosing to walk away from the platform altogether. Others might have adjusted their selling practices to stay below the taxable income threshold, if they had known what that threshold was. Regardless of whether or not eBay is required to give advance notice, allowing people to do right by themselves and HMRC should be the priority. Unfortunately, it seems that eBay's tactic was to catch people off guard. However, for many sellers, this was a matter of survival, and eBay could have chosen a different path that would still hold people accountable without putting them in financial jeopardy.

What choices do you have? The HMRC allows regular individuals to take five years to establish and maintain a successful business. How many celebrity children are given a head start with established networks, financial backing, and guidance? How many wealthy families pass down these same opportunities to their children? I'm not here to criticize them, but rather to showcase the fact that most people need assistance. Most people deserve a chance. Why target those who are also seeking the same opportunities? Let everyone have a chance to climb up that ladder.

eBay could provide people with a notification of this change. Why? It is possible that some people may not be aware of the threshold, and abruptly find themselves facing significant challenges they cannot afford to handle. It doesn't matter if they have made mistakes in the past; it does not mean they are incapable of making things right now. But penalising them may destroy them financially. Even Trump gave people forewarning and a chance to leave the country before he takes office. It would have been possible for eBay, with all of their resources and influence, to implement a policy that allows individuals the opportunity to make things right, whether they were aware or not.

Increase the threshold so that people starting out can survive. Increase the threshold so that people's aim of paying off debt and bills can actually achieve that goal.

Give anonymous support to guide people. Getting people to the right place should surely be the priority goal here. Issuing fines to people who are financially struggling seems extremely punitive and unnecessary as a first step.

Both parties could have agreed to a temporary halt in this situation, a moment of reconciliation with both the laws and the legal system. We will address this issue. If your business is not able to sustain itself, we suggest lowering your revenue below the threshold or officially registering as a business. We will provide a reasonable period of time for you to comply with the law, like a honeymoon, to organize your affairs. For small entrepreneurs, why punish them into bankruptcy? These are individuals who may not have the means to withstand such penalties. This is not an opportunity for corporate bail outs; it's simply allowing people the chance to correct their mistakes first.

As an eBay seller, ask yourself if you ever wish you had the opportunity that someone else has. What is it that makes you angry? Is it because you feel like someone else has a chance that you didn't get? Instead of listing why they shouldn't have the opportunity, question why you didn't and why the next person shouldn't have it as well. If you had the chance to have 5 years to build, would you have liked it? If you got caught out on eBay for something - you knew or didn't know (and please no one here is perfect. We all live in glasshouses here. How would you want it to be handled? Would you want grace? Understanding? - I know the answer, even if you don't want to state it.)

I stand with the sellers who are experiencing fear, frustration, and anger towards a system that targets those who are already struggling with limited support and resources. I get it, no one has sympathy for people who haven't obeyed. There's a long list of those and personally,  I feel less aggrieved at small sellers on eBay trying to rebalance what no government or corporate has any incentive to look into. eBay and HMRC should be ashamed of themselves.

On a side note, I have a deep appreciation for language. It plays a crucial role in shaping our opinions. They refer to it as the 'side hustle tax'. Are there no other ways to phrase this? Why just 'side hustle'? It seems to imply that these individuals are conning people out of their money. Maybe we can use 'finding ways to make ends meet' instead? After all, they are most likely targeting people like your struggling neighbour who is barely able to pay their electric bill. That doesn't quite fit with the connotation of hustling. Personally, I prefer 'people trying to make ends meet', and if we want to be more cynical, why not go with something like 'taxing those who are unable to defend themselves' or 'selectively taxing' is more politic? But no, we chose a phrase that paints an unseemly image and prevents many from recognizing this as an issue because who wants to support hustlers? But in reality, they are simply hardworking individuals using their hard work and ingenuity to make ends meet in a society where wages and cost of living don’t seem to find a meeting place. And we encourage vilifying through loaded terminology to distance ourselves from those we have most in common with.  And we don't vilify a situation that is far more invidious because we believe we identify with it because of laws someone else made because we like to see ourselves as ethical. I see myself as ethical but I align elsewhere because legal and ethical aren't always bedfellows.

[therenewalworkshopltd]

When the threshold for reporting income is £1750 per year to HMRC, that seems very unfair. It may be within the bounds of legality, but it certainly isn't ethical.

Not sure where your getting that figure from, but the maximum that you can TURNOVER (not earn) before having to register as self employed is £1000.  Which, just make that clearer, is only just over £19 a week.

The thing is, though people have been earning pin money since forever by doing exactly this kind of thing, it has simply never been legal to do so, unless it's below the threshold.

So, I wouldn't have a go at someone at or even slightly above the threshold, but when they consistently do this for years, not just a few months, there is simply no excuse for it.

I see posts so often with people saying 'if you can't afford your business, you shouldn't be in business'. I disagree wholeheartedly because I never want to see the day where only those who can afford, are able.

Sorry, but what you are essentially saying here, is that if they aren't making any money then should continue.

From a straight financial aspect, that makes no sense whatsoever and is exceedingly bad advice.

If someone is struggling and can't stay afloat, what do you expect to happen?

Are you actually aware, that the vast majority of new business, fail within the first 12 months?

So yes, ethically speaking, I align with those individuals who make £5000 on eBay without reporting it 

Could you please explain what is ethical about breaking the law and not paying tax on your income?

Those people doing that, are breaking consumer law, so every single person that buys from them, is not getting their rights.  Is that really ethical?

The HMRC allows regular individuals to take five years to establish and maintain a successful business. 

Please do provide links to the HMRC website where they state this?

You have entire paragraphs about penalties to those who aren't really traders.

I refer you back to the £1000 limit, or £19 per week that your allowed to earn before registering!
Why should any of these people be allowed to earn more?  Nobody gave me a handout to build my business!  To do, is unfair in the extreme.  

You have a deep misunderstanding of the rules/laws that you are talking about.

Just as a by the by, Ebay has absolutely nothing to do with the new regs for reporting to HMRC.  You seem to think they do for some reason as you are blaming them for this.

You also seem to forget, that every single person has a tax allowance where they can earn a tax free salary, before having to pay any tax.  Currently, £12570.  That is allowed for, whether employed, self employed or a mixture of both!  So why should anyone with a side Hussle and a full time job, get an extra allowance?

[tibe-9422]

Why should any of these people be allowed to earn more?  Nobody gave me a handout to build my business!  To do, is unfair in the extreme.  

^ and that is why you have a deep misunderstanding of the rules/laws that you are talking about.

I am able to espouse my views if I so please. I suspect that due to your feeling that things are 'unfair' you can't see the wood for the trees, so I don't feel obliged to respond or justify. If you step away from 'it isn't fair for others to have what I didn't'  you might see several questions that are just as legitimate areas to question. Just as many areas of why someone can get away with this or that. Do you know that Americans get very angry because of healthcare? They don't see it as a right. In the Uk, many people do see it as a right. We won't likely convince those in America, and they won't likely convince us here. Both are legal. Where we stand on the ethics is the question. 

Do you know that inheritance laws are so very different in Europe versus the Uk, even England to Scotland are different, versus Asian countries. All are legal but we don't follow them all, and certainly as individuals we feel more aligned with one based on our values. Same goes with the American healthcare. Same goes with this. Where do my values align? They align with a very ethical place. It isn't your place. But it's mine and it's others. I speak to them because while I see your point, I disagree with it. You can't even see my point. There is really no point to discuss it with you.  That the right of something I speak of, isn't wrong because it doesn't follow arbitrary rules set up by people - humans - so often flawed in their logic. I am free to question their logic as they set out the laws, right? I believe in different rights to you. Ones that would have benefitted you, and if they had, you'd see them as inalienable rights to people, rather than people breaking laws that maybe shouldn't exist to begin with. For the master's tool will never dismantle the master's house. 

Also I don't say that HMRC gives people 5 years to set up. I said they should give people 5 years. Yes, I am permitted by law to question laws and agencies decisions. 

Thanks for your response Felicia. 

[sml192]

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@tibe-9422 wrote:

When the threshold for reporting income is £1750 per year to HMRC, that seems very unfair. It may be within the bounds of legality, but it certainly isn't ethical.

The thresholds for reporting income are set by the OECD (Organisation for Economic Cooperation and Development), nothing to do with HMRC.  Exceeding the reporting thresholds simply means that the seller's sales will be reported to HMRC, it doesn't necessarily mean that the seller will need to pay tax or even file a self assessment. 

And shame on HMRC for going after small money when there are bigger fish out there scamming us regularly and getting away with it. It's time to step up and speak out about these issues.

Where have HMRC said that they will be going after small money.  How HMRC will deal with the sales being reported to them is currently unknown. 

eBay should have informed their sellers much earlier, giving them time to make informed decisions about their business's future. Some sellers may have seen the numbers and realized they couldn't make it work, choosing to walk away from the platform altogether. Others might have adjusted their selling practices to stay below the taxable income threshold, if they had known what that threshold was. 

Ebay informed sellers of the new reporting thresholds in January last year, so plenty of notice. 

There are no new tax rules.  The personal tax allowance (£12,570 per annum) and the trading allowance (£1,000) remain unchanged. 

Increase the threshold so that people starting out can survive. Increase the threshold so that people's aim of paying off debt and bills can actually achieve that goal.

What threshold are you referring to here? 

Both parties could have agreed to a temporary halt in this situation, a moment of reconciliation with both the laws and the legal system. 

As stated the reporting thresholds have been set by the OECD.  Neither HMRC or eBay have any input into this and there have been no changes to the actual tax rules. 

eBay and HMRC should be ashamed of themselves.

Why? 

They refer to it as the 'side hustle tax'.

If you read EBay's help page it actually states that there is no 'side hustle tax'. 

[tibe-9422]

Any situation decided by OECD is with the knowledge and information shared by the country. It wouldn't make a lot of sense to use the same number in a poor country with a very different economy. It also wouldn't make sense to use it in a very wealthy country either where the wealth per person is much greater. Each of these numbers would have some adjustments for the country, cost of living expenses (which change), median wage, etc. They aren't coming up with this amount on their own, it is with the country providing information and also determining the ability of their citizens to accommodate it. If they came up with a threshold of £100 for reporting, then I'd suspect that our government would say that is too low. Or better still, if they said we need to tax your highest earners at a much higher rate, I can guarantee you, our government would say 'We'll lose our best industries! We'll lose our best players! They'll move away!' This isn't in a vacuum. And making decisions about what can be accepted, what will have no choice about being accepted, I am certain wasn't an international entity dabbling in countries that they need country specific knowledge about and a government that will either accept their plan, if they think it will work, or ways in which they re-butt the plan because of mitigating circumstances.

No, eBay didn't inform everyone. Some people got informed last year. Some people got informed this year. Not everyone was informed last year in advance of this year. You may want to check that with all sellers. I can't tell you because I am not all sellers, but I do know a few sellers which are friends or acquaintances I trust who only received an email this month which isn't much notice. Do you know that everyone received notification, because my sources say different.

You say, often, there is no new tax. No, we all know there is no new tax. I didn't say it, no one said it, we can stop playing the loophole of no new tax please? What I've clearly said, and I imagine many other will have said or thought is about how this established tax is now being handled, which is new. People are finding issue with how it is handled. People may have issues - gasp - with the fact that some of it exists (my comments on the thresholds and please take your pick Personal tax or trading allowances - I don't care other than to say we should encourage small business opportunity environments by not making them hostile environments at low level amounts).

And I dislike the term 'side hustle' when I see a very different reality for many people. It's loaded.

[sheba-knows-best]

Lovely post. And were we sat in a pub we'd probably be there until last orders putting the world to rights. I agree with your sympathies wholeheartedly. 

The problem is, a lot of the people 'struggling to make ends meet' you describe so eloquently are small business sellers, listed as businesses, now being put out of business by the hard-working private/business sellers, many of whom have other jobs to fall back on (albeit badly paid). The small business sellers have nothing but their broken businesses.

The two-tier system isn't working. I sell in  'pre-loved' one of the categories most accessible to (make that inundated by) private/business sellers and I can confirm it is very, very competitive right now.

I hold onto the hope that ebay wants to get rid of fees for small business sellers but needs to know it will replace the lost income in buyer fees. Fingers crossed.

[ett1954]

@tibe-9422  "Any situation decided by OECD is with the knowledge and information shared by the country. It wouldn't make a lot of sense to use the same number in a poor country with a very different economy." - The 38 members of the OECD are all countries with a well developed economy - one of the reasons for this initiative is to identify where money is syphoned off, including by the rulers and 'rich' of these poor countries you mention, which should be used for the benefit off the general population of those countries.  OECD countries both individually and as an organisation make monetary and support donations to those less developed countries. 

OECD countries have robust laws which include clearly defined rules on tax.  Whilst I can understand your sympathies with those less privileged in the UK as an example; those exploiting the rules for financial gain are not only evading their tax liability but by their actions are taking sales away from legitimate sellers who pay their dues on which tax would have been paid.  These very taxes are in turn used to provide those benefits to the very people you espouse to support.

Whilst I have every sympathy for those who genuinely struggle, I have no sympathy for those how 'play' the system for their own personal benefit resulting in the loss of taxes used to support the critical infrastructure, NHS, education, etc., on which all in our society rely upon.  As @therenewalworkshopltd  stated there are measures in place to ensure income and benefits are not taxed below certain levels.  This gives anyone the means to earn a defined amount before any tax would be required.

[therenewalworkshopltd]

Nothing like completely ignoring what I said to put forward your own opinion....

A clearly well though out argument, not at all.

And just for the record, your statement at the end of that post is:

Also I don't say that HMRC gives people 5 years to set up. I said they should give people 5 years. 

What you actually wrote was:

The HMRC allows regular individuals to take five years to establish and maintain a successful business. 

Which quite clearly says the opposite of what you just said.

[tibe-9422]

I said about the OECD because a person said that they determined the levels and I simply said that they do not do that without country specific knowledge and information because it wouldn't make sense for all countries. That's all.

And no I didn't say I support doing wrong. I said that I think that people could be notified early (and no they were not) so that they can do right. There are some very dangerous situations I am aware of, that you aren't, that the early notification would be critical. So give people a chance to know beforehand and eBay could have done that. 

I also am referring to an unjust situation with the levels. Situations which affect business sellers, low economic situations, fragile economic situations and that I believe that HMRC could do better with several ideas to better help but then I had someone tell me that OECD determined it, not HMRC, which I disagreed with (as I stated above) because any decision is made in partnership with the country so I state, re-state, HMRC could make a better situation by providing a better level up for small businesses and people needing the extra income by raising their level of taxation. I am well aware that after the banking industry bail-out, they somehow still gave bonuses to employees (certain ones) because they said they would lose their talents. There are lots of mitigating circumstances used to justify situations. I am simply using mitigating circumstances that should be used for many low income and that includes small business, starting business and those who you name and shame because for some reason, we're all so starving down here we'll tear each other up to survive. There's different ways too. I am not against small businesses upset because people did wrong. I get it. I however don't believe that people struggling also need another hit in their lives either. Many who may have done this, didn't know, or had situations, and I don't believe that they need to be hit hard financially either. 

So I don't believe in breaking the law. I believe in better chances for people in lower positions, legal and skirting the legal, because most of us small businesses should be together and if you see successful sectors or groups, they stand with each other. So I don't stand against you. I stand against a situation I think is begging for new reform. And I stand against a system that I believe could give people a chance to fix something before potentially hitting them.  You presume people play the system, but that isn't really the case and as you haven't talked to many, you may not be aware that it's not a one-story picture. It may not make it right, but if banking industry can get bail-outs and bonuses, then I'm happy to support those with lesser means and fewer advocates and resources. 

[tibe-9422]

No, what I said was:

'What choices do you have? The HMRC allows regular individuals to take five years to establish and maintain a successful business. How many....' because the question beforehand was to note what could be done with several better options so the statement was a suggested better option, along with a moratorium , give notification, give anonymous advice to name a few. So it was a suggestion not a factual this is what is happening. 

I did answer you but look you can't see the argument and I can't illuminate it for you. But I would like you to get help, along with many others, so I'm not against you or that you should or could have had help as you began. I am against other situations and I don't believe that everyone in the middle or bottom has to be upset with the person next door. You are angry because you have to suffer, so are others, you vent it out here with assumptions about why they do it or how it is unfair that they do. They may be in precarious situations and also feel less choice at times, angry at a situation that is also unfair. Don't presume that everyone is automatically scamming. It's what I hate with the language used. Stating side hustle. Yet, if you heard stories, you might think - well what would I do? Or why are any of us in this situation fighting with one another? But I can't make you see it. So I stand with my statement that I am standing with people frustrated with how this is handled and that it could be done better in several ways. I am not, not upset with people doing wrong, but I see greater wrongs and I'm sorry but they seem worse to me. I am not upset with you for your feelings, because again, I see greater wrongs than you feeling begrudging about better methods being made available when they weren't to you. It's not a great position but it's not a bad position so I'd rather not attack you on it. I'd rather argue that I see greater wrongs. My ethics state that if there are great injustices, divisive methods to divide people from one another, more stark situations with greater economic difficulty with wages not growing, costs growing by greater measures, government not really doing something about a growing disparity, then you'll have people who skirt and you'll have people who hate them, and I think that most people skirt - they don't want to admit it - but they do. Maybe you are the first whiter than white business person, but many aren't and many walk on the line with a few tip toes over. Most of those people are not committing the worst crimes and they'll justify it because there are not enough safety nets. It's surpising how much in common people actually have.

[therenewalworkshopltd]

I love the way you presume about how others feel.

You are not worth the time of day to argue with.

[ett1954]

"I said about the OECD because a person said that they determined the levels and I simply said that they do not do that without country specific knowledge and information because it wouldn't make sense for all countries. That's all." - But that wasn't all; please re-read your post.  OECD is an organisation made up of 38 'economically stable' countries; each has an equal voice and the figures were agreed by consensus.  I somehow believe you feel these are taxation levels, they are NOT, they are simply the levels upon which digital platforms have to report income levels of members to their respective tax authority.  It is then the job for the tax authority to investigate, if at all, against whatever parameters they set themselves.  In the case of HMRC nobody knows what these are for obvious reasons.

"HMRC could make a better situation by providing a better level up for small businesses and people needing the extra income by raising their level of taxation." - HMRC do not set the level of taxation; it is set by the government of the day.  HMRC merely collect what is due from whatever regulations and criteria government set.

"You presume people play the system, but that isn't really the case" - I, and I am sure many other correctly registered business sellers on this platform would disagree.  That is not to say I am accusing them of not paying their due tax liability, I am sure the majority do; however I am also sure a significant number don't  whether through ignorance or intent.  But by not registering their activities accordingly they are  all breaking the law ("So I don't believe in breaking the law.") which gives them an unfair competitive edge against legitimate businesses by selling with no fees attached to their activity on eBay.  Remember many of these correctly registered small businesses also have to pay bills and put food on the table.

[returns_andexdisplay]

You've come to a business seller board complaining about having to register as a business and all it in tails and that it is not fair. 

Go open a shop and see if you can avoid registering for business rates with your local council. 

As a business it is your responsibility to know what you need to register for and the laws. Yes there is help out there with places like local chamber of commerce, articles on government websites. 

[tibe-9422]

So first, it's a free country and we have the right and yes the responsibility to state our opinions and even do so in venues least likely to like them. Don't like it, move to a fascist country.

I never said I wasn't registered. I said I stand by those who haven't. I needn't explain again why that is because you didn't read it anyway and you seem to believe you, and other sellers, can dictate that someone can't speak about issues you don't agree with so it seems rather dictator like and I'm certain we're not going to see eye to eye when you seem to identify with power structures I conversely disagree with as the tone of my message indicates and the fact that I disagree that this isn't the venue to espouse views on selling issues when they don't align with others but are valid. 

[krafty-kreations]

you seem to believe you, and other sellers, can dictate that someone can't speak about issues you don't agree with so it seems rather dictator like 

Nobody on this thread has said you cannot speak about issues, however they do not have to agree with you, after all as you point out it is a free country and this is a discussion board.

[papso22]

In my opinion only factually correct posts can be helpful to other members.

Ill-informed ones have the opposite effect.

[tibe-9422]

Please. Ive never said to anyone why are you responding. However I did get this message and I responded . I'm not going to chase my tail with this group, responding to one to be accused by another! Read all posts so you understand CONTEXT. Yes, context to respond to another member is quite critical before you accuse. So either read all posts or don't respond to the last one claiming some inner knowledge of what I want.

Quote I RESPONDED to:

"You've come to a business seller board complaining about having to register as a business and all it in tails and that it is not fair. "

[tibe-9422]

'In your opinion' is about the only factual part. I won't respond to you other than to state this again, for reasons you know. 

So my original thought on echo chamber forum experts is reaffirmed and the world makes sense, and yet not. 

[the_book_seekers]

ebay made an offer to business sellers on private accounts of a free featured shop for three months if accounts registered as businesses. If the offer had been made now it might have had more success. 

[vintagevilarosa]

And yet the rich do that kind of thing every day but its called legal because they can afford great accountants! Its a shame that the government do not go after the big tax evaders instead of going after the little guy!