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.
