Freepost & HMRC

[soundsreasonableuk]

I’ve seen many posts regarding HMRC reporting etc which to be honest doesn’t effect me at the moment however I will be selling items that cost more to post than the items are worth.

One thing I have noticed is the number of sellers going away from free postage.

As I understand it Ebay report the amount of money made in an account if above £1000 (or 30 items) so if free postage is used it becomes part of that amount whereas having postage as an extra it doesn’t get reported count towards the £1000 you are allowed to make without being possible liable to tax.

I know ultimately you can prove costs ire postage and cost of the original items but it would seem to take a lot of people out of the £1000 reporting barrier.

So before I start selling again, are smaller sellers not doing free post anymore or is free post still a thing?

( I really don’t want to get involved in “is someone a private seller or not” which I’ve seen on a few posts)

thanks

[krafty-kreations]

As I understand it Ebay report the amount of money made in an account if above £1000 (or 30 items)

I believe it is £1740 or 30 items.

https://community.ebay.co.uk/t5/Announcements/Information-regarding-UK-digital-sales-reporting-to-HM...

The £1000 is something different, it is a tax free allowance where you do not have to submit a tax return but I am sure it is gross so postage charges would be included even if separate 

[papso22]

Quite right, postage charged by a seller is part of turnover, so included in the £1,000 and the £1,750.

[davrman]

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@papso22 wrote:

Quite right, postage charged by a seller is part of turnover, so included in the £1,000 and the £1,750.

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Yes, but with Simple Delivery the seller never receives any money for postage – eBay does...

[krafty-kreations]

Simple delivery is for private sellers, they aren't trading just selling off their own belongings so the £1000 tax free allowance wouldn't relate to them.

[soundsreasonableuk]

• Total sales on eBay is equal to or more than €2,000 (approximately £1,740) after deducting fees and commissions or taxes

Nothing about postage?

So is postage costs reported by separately or included in what  Ebay send  to HMRC ?  because if it is its easier for HMRC to determine any follow up, if not reported then that's the way to go for low volume sellers where postage costs more than the item surely?

[soundsreasonableuk]

ultimately what I am saying is if I sell for example  £1800 of goods but they only make £500 in money - I don't want to end up with having to fill in a long tax form where HMRC don't get any tax and all I get is a headache filling out forms which is a waste of time for both parties.

[brainuk]

But........ If you sell 30 items, then you hit the threshold anyway. Whichever comes first, 30 items or the figure, whatever that ends up being!

[papso22]

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@soundsreasonableuk wrote:

ultimately what I am saying is if I sell for example  £1800 of goods but they only make £500 in money - I don't want to end up with having to fill in a long tax form where HMRC don't get any tax and all I get is a headache filling out forms which is a waste of time for both parties.

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Are you buying with the intention of selling?

[soundsreasonableuk]

no just selling my old stuff and clearing out my mothers house.

[soundsreasonableuk]

selling 30 things is Ebay not HMRC threshold isn't it? 

[brainuk]

The threshold is 30 items or £1700 which ever comes first. Then you have to give HMRC your Nat Insurance number.

[sml192]

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@soundsreasonableuk wrote:

selling 30 things is Ebay not HMRC threshold isn't it? 

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To be precise it is a threshold set by the OECD, so neither eBay or HMRC. 

[sml192]

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@soundsreasonableuk wrote:

• Total sales on eBay is equal to or more than €2,000 (approximately £1,740) after deducting fees and commissions or taxes

Nothing about postage?

So is postage costs reported by separately or included in what  Ebay send  to HMRC ?  because if it is its easier for HMRC to determine any follow up, if not reported then that's the way to go for low volume sellers where postage costs more than the item surely?

'Your total sales for the year are calculated based on the full amount received for your sales transactions excluding:

• Cost of shipping labels purchased on eBay
• VAT collected and remitted by eBay
• VAT charged on fees
• Amounts deducted by eBay for fees, coupons, cancelled or deleted orders
• Returns'

https://www.ebay.co.uk/help/account/regulatory/sales-reporting/uk-digital-sales-reporting?id=5454&st...

[incredible_how]

I'm wondering if now the postage isn't included...and hopefully not the buyer protection fee!

[sml192]

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@incredible_how wrote:

I'm wondering if now the postage isn't included...and hopefully not the buyer protection fee!

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The Buyer Protection Fee wouldn't be included as it is paid by the buyer not the seller.  Ebay fees aren't included anyway.