Ebay holding my money ransom

[pvmr1980]

Posted again as answer incomplete.

I have never sold on Ebay until this year. As we are downsizing, I have been selling old items from our loft which we have owned for years or been left by family who have since deceased. These items were purchased with money earnt whilst working and vat paid on the original purchase. Over the year, I have sold just over £1000 which is much needed towards household costs, but due to rules by Ebay on reporting "taxable income", my money (£27) is not being released unless I give my NI Number. I totally object to Ebay policing my account on behalf of HMRC and I'm sure blackmailing a client is unethical and potentially illegal. I understand the need for ensuring a business is taxed, but for a 70 year old clearing stuff out this is appalling. 

The answer I received just directed me to policy.

It did not answer: Why did ebay allow me to continue to sell items knowing it was not going to pay the proceeds from my sale to me; holding them ransom?  If the policy is 30 items, then simply prevent sales over that. 

[papso22]

Sorry?

There is no difference between legislation and the law,  they are literally the same thing.

You clearly haven't read the user agreement,  it includes a section that says they can withdraw their services (which includes payment services) if they think a member is causing a legal liability for ebay.   Given that ebay gets the fine for not abiding by the new reporting regulations I would say that covers the non provision of the National Insurance number when asked for it.

Ebay's most recent user agreement came in after the reporting regulations,  that is a new section, I think to cover just this scenario.

Anyone who sold after this addition to the UA agreed to its terms.

[craft-modelling-supply]

legislation by definition, is a set of rules laid out in parliament that eventually (mostly) leads to law. Legislation therefore is not necessarily law. 

you clearly haven't read my post. At no point did I argue about the contents of the eBay user agreement. I said 'Irrespective of whatever is in the agreement......'

You are missing the point of this thread, seemingly blinded by the user agreement and what ever constitutes law or legislation.
Put simply, eBay ARE withholding sellers funds and using it to coerce sellers to provide their NI number. Fact.

Perhaps a better, nicer approach would have been to suspend everyones selling account until they provided the information. Sellers could then make an informed choice without having any financial loss via coercion. EBay would probably have lost too much business in that scenario so that is probably why it was nt rolled out that way. 
The government have now acknowledged that perhaps the £1000 threshold was a tad low and have agreed to raise it to £3000. But not just yet...... watch this space

[papso22]

I agree with you, ebay is using the only thing it can to try and get members to provide their NI number. That's withholding funds.  But I don't agree it's illegal.

The trading allowance threshold of £1,000 is nothing to do with the reporting thresholds under the rules from 1st January 2024.

The trading allowance is not being raised to £3,000, what may be raised is the threshold for the full self assessment return.  The tax rules themselves have not been announced as changing.

[ile136yz]

---

@craft-modelling-supply wrote:

Irrespective of what it says in the agreement, eBay is withholding money that doesn't belong to them in exchange for information. Other well meaning posters in this thread also don't seem to understand the new legislation. It is eBay, not the individual seller that is liable for a fine (from HMRC) for not providing the information. As a result, eBay are unlawfully withholding monies belonging to an individual, to force or bully them into providing said information.  That is definitely coercion, and I would say, against the law. 
As stated by someone in an earlier post, you should do some homework on the differences between legislation and UK law. 

---

Correct it is eBay that will be fined if they do not ask their eBay Sellers for their NINO, but if they cannot get the info they should information the eBayer first of the basic information they have to send to HMRC.

eBay may/will inform them that their sales funds will be put on hold & state date it will be paid out as it cannot be withheld forever..

[lovejoyantiquesss]

you are stopped from purchasing  anything of ebay as well

[sandradam723]

Ebay are earning interest on this money so should pay interest to the seller whose funds they are holding. Also, what is the time limit for them to hold the funds? Indefinitely? Come the start of the new financial year you start from scratch again and that should be the longest they hold your money. They cannot justify holding it longer.

[williamstheterrible]

Of course its illegal.

They are withholding money to extort information from you.

If you don't want to contract with the Digital Sales Legislation they must allow you to close your account and return any moneys they are holding.

If you sell an item on eBay, when you have met your legal liabilities between the buyer and ebay has taken the full payment and then you have shipped it to the buyer and provide tracking and know they have received it, has nothing to do with providing your NI to them.

Your failing to note they are still taking their cut of your sale and now illegally hold on to your cut of the sale until you are extorted to provide information.

Most people would look at that as fraud... you sending goods to a buyer but you never receiving a penny for it..

I no longer wish to sell on ebay.. but they wont allow me to close my account, because they are with-holding £150... unless I provide them with my NI to continue to sell.

I do not wish to sell anymore and do not wish contract with ebay any longer.

[insidethe93]

What might be causing much to and fro between posters is that what's legally required and what's morally iffy have become a bit confused.

There is no official guidance from HMRC or the government indicating that an online selling platform such as eBay can discharge its legal reporting obligations by simply informing HMRC "this seller refuses to give their National Insurance number" though you'd think there should be provision for that. It seems poorly thought through as it leaves eBay to do the work, which not only feels unfair on eBay but is unnecessary, because the Nat.Ins. number (NI) can be (and arguably should be) a matter between the seller and HMRC only, as with so many aspects of tax. Yet eBay and seller are held liable, because HMRC is empowered to fine or penalise online selling platforms that fail to provide required seller information, including NI, under new rules in force since January 2024: reports that are "inaccurate, incomplete, [or] unverified," HMRC can impose "hefty fines and penalties" on the platform itself, not just on the seller.

It's also time-critical: there's apparently no exact statutory timescale for HMRC to issue a penalty, HMRC's enforcement typically follows the annual reporting cycle - platforms are expected to collect and submit seller data by HMRC's deadlines which are generally at the end of the tax year or as otherwise specified in the reporting rules, and if the required info (e.g. Nat.Ins. number) is missing at the time of reporting, the platform is immediately at risk of non-compliance penalties once the reporting deadline passes.

Onto the morally and perhaps legally iffy bit: my research indicates that in the event of non-compliance such as a seller withholding NI info then the "expected procedure" is for a platform to "restrict" the seller's activities until compliance i.e. to try and force compliance, but there's no HMRC/government guidance on what "restrict" means. I don't know what other platforms do, but eBay has gone with, in my view anyway, the morally concerning and perhaps legally iffy route of withholding a seller's money instead of suspending the seller's account pending compliance, because that withheld money belongs to the seller and if eBay is earning AND KEEPING interest earned on it that's even worse and THAT should be illegal. So if/when the seller eventually has to comply and provide their NI number, eBay should be morally AND LEGALLY required to release the seller's money AND the interest earned on it.

[insidethe93]

I should've said that a selling platform can flag a seller as non-compliant if the seller refuses to provide their National Insurance number, and I gather eBay’s practice is to report the data it has to HMRC and flag the seller as non-compliant, but this merely tells HMRC that it attempted to collect the required data and the seller did not co-operate, yet such a flag doesn't absolve eBay of its legal reporting obligations and it remains that HMRC can punish (e.g. a fine) both eBay and the seller as I've explained.

[insidethe93]

I believe that whenever eBay releases a seller's withheld funds that any interest earned on the seller's money should be given to the seller too, but on this thread that's probably another matter.

[williamstheterrible]

in my case I requested to close my account and to be refunded monies due.  I do not wish to sell online anymore as I do not agree with the Digital Sales Legislation, so therefore to do this my choice of option is to stop selling. I understand if i wish to continue selling I would need to provide my NI. but i do not.

eBay refuses.

I'm told to close my eBay account any balances must be at Zero, but they have frozen my ability to withdraw money I am legally entitled to because I have already shipped and supplied the goods, therefore for fulling my legal obligations.

The TIN team state they have no provision to provide my money unless I provide them information.

The definition of extortion; the practice of obtaining something, especially money, through force or threats.

I have told them I am happy for them to flag me as non-compliant, because I wish to terminate my account with them and will not be returning to there platform.

In fact is wish to terminate all contracts with them.

The only option i was given was to write a formal complaint to:

eBay Commerce UK Ltd. (""ECUK"") 1 More London Place, London, SE1, 2AF, United Kingdom

[papso22]

When ebay imposes holds for 'policy infractions' they seem to last a maximum of 170 days, that must be some sort of legal limit. 

[insidethe93]

If your eBay selling exceeds the reporting thresholds (at least 30 sales or over £1,700 in a year), eBay's legally required to report sales data and personal information to HMRC including flagging that you withheld your NI number. eBay isn't at fault in any way there, as it's acting as legally required. With you flagged as non-compliant re NI, the platform will forward to HMRC all other available details such as name, address, date of birth, bank details and transaction history. If HMRC decides to go after what it views as "trouble-makers" it could mean you get scrutinised by HMRC sooner rather than later, but then at least it'd be between you and HMRC only which, I assume, is your intention.

Closing your eBay account after making sales doesn't prevent eBay from reporting your previous activity to HMRC. The obligation on eBay to report covers all relevant sales made during the reporting period, regardless of whether the account is still active at the time of reporting.

I sympathise on not wanting to give anyone your NI number (or date of birth etc) as it's a piece of data that's useful to would-be ID-thieves but that's assuming they get hold of it. eBay will have policies and procedures in place to protect such data, and it's regulated too, but no one can force you to trust them if you don't actually trust them.

[insidethe93]

Not quite but it's a popular misconception, and even though I know the difference (from postgrad studies) I'm sure I've used law/legislation as equal synonyms to avoid nit-picking. (I've just googled to double-check.)

Government legislation forms only one part of law. Law comprises all rules governing a country: legislation i.e. statutes/Acts created by Parliament; common law; case law; international law. Law can be created by Parliament; courts/judges; international treaties. Legislation can only be created by Parliament or its delegated authorities.

[insidethe93]

If law/regulations forbid it then eBay's user agreement cannot legally override, at least not legally but in practice does so if the user complies e.g. users might mistakenly think a user agreement overrides the law. Even if a user signs, or is deemed to have signed, a contract that diminishes their statutory rights, they still do not actually lose those statutory rights: I believe it should be made illegal for any user agreement to have T&Cs that seek to diminish statutory rights. However, in this case it's that there's no law/regulation about it, not even guidance, which leaves eBay to decide how to try and compel seller compliance. In a way I feel sorry for eBay, as seller AND eBay can be punished for seller non-compliance e.g. by a fine.

It'd be a really good idea if HMRC would provide guidance at least, because selling platforms are legally obliged to  work for HMRC.

[insidethe93]

craft-modelling-supply wrote: ...It is eBay, not the individual seller that is liable for a fine (from HMRC) for not providing the information...

Yes, but the seller is still liable for any penalty imposed by HMRC under general tax rules. And that could be a fine, small or large. The hassle and stress of being investigated by HMRC, even if there's no tax to pay, may not be worth it!

Bank account details are passed to HMRC but don't worry: HMRC cannot automatically reclaim unpaid tax from a seller’s bank account (called Direct Recovery of Debts or DRD) solely based on information from a selling platform. Direct bank recovery by HMRC is only possible after a formal process, specific legal criteria are met, and the taxpayer is given notice and an opportunity to respond.

[williamstheterrible]

looks like a misleading post to me.. 😉

according to a eBay supervisor it can be held indefinitely

[papso22]

---

@williamstheterrible wrote:

looks like a misleading post to me.. 😉

according to a eBay supervisor it can be held indefinitely

---

I posted based on  users' experiences on these boards.

I take anything ebay CS tell anyone with a pinch of salt, most of them are less than well informed.

[craft-modelling-supply]

The eBay supervisor is clearly miss-informed and possibly full of their own importance.

To put this in plain English....... eBay is a shop window that introduces a buyer to a seller or vice versa. EBay are a middle man. They conveniently pass the buyers remittance to the seller for the purchase of goods and charge a fee for that service. The monetary contract or purchase 'agreement' is between the buyer and the seller. EBay only provide the convenience.

As I have stated previously, irrespective of eBay's terms, conditions, rules, or whatever, they do not take precedence over law. Taking money belonging to someone else until they conform is unlawful. It is theft. The only reason eBay 'think' that they can hold your funds indefinitely is because the withheld funds are probably not a huge amount of cash (generally speaking) and it would cost too much for the rightful recipient to pursue eBay via legal channels. 

[papso22]

You have indeed stated all that previously but without any reference to where it says in legislation that what ebay is doing is unlawful. 

I am afraid I still disagree with you.