Are your taxes in order? eBay now sending sales data to HMRC

[myriad*seller]

From 1st January 2024 eBay will be legally required to give all sales data to HMRC, so business sellers not paying taxes and/or masquerading as private sellers on eBay will soon be a thing of the past

Plus it will be interesting for all the sellers that now have to declare previous years turnover and pay back taxes and penalties...

This isn't the usual "HMRC are clamping down on sellers" line they use to scare people (but never actually do anything), this is a whole new digital computer system and reporting system that eBay are legally obliged to do from now on, to send all sales details for all sellers to HMRC so they can ensure people are paying taxes on their "side hustles".

It will also apply to other self employed roles such as delivery drivers and people who rent out via AirBNB and similar platforms, all their income will be declared to HMRC who will want those figures to match the taxpayers tax return. 

There will be a lot of worried eBay sellers now.... who've been trading illegally for years, with the feedback history to match, and who have pretended to be "private sellers" until now... 

https://www.thisismoney.co.uk/money/bills/article-12640869/Is-taxman-coming-hustle-Airbnb-Ebay-Uber-...

[555njp]

Absolutely and eBay is only one data source for HMRC. They will also have income from work, pension, benefit, interest on bank accounts plus ETSY, Amazon, Vinted etc. as applicable to each individual, all tied in to their NI number.

[a45heaven]

Ive asked before with out a full answer -

What will partial information from limited platforms be of of benefit to HMRC? Apart from putting Private sellers into Business status, which ebay ignore.

Has anyone else had an approach from any other platform apart from ebay for plans to request sensitive information to be divulged thru a new Fujitsu system to HMRC?

Will none UK based selling platforms be providing the information to HMRC?

[555njp]

Fully understand that. I found eBay when I had to clear tons of stuff when my grandparents passed. Gave loads away but eBay was like a very convenient car boot sale! We've since cleared out our own stuff we no longer want and my kids frequently ask if I'd list some of their bits. It's surprising just how much a family of four accumulates over the years.
I keep business records (totally separate) but also have a spreadsheet showing every single private item sold on here since 2006 when I started. In that time We've recouperated nearly £10,000 (after fees and postage) from 1200 items, although it goes in peaks and troughs with some years where I sold only one or two things. Not really a lot of money from 17 years given the effort to list, post etc. but better than putting it in land fill!

[1984jo]

Well I think it is down to people on benefits and people who are making thousands who they are really looking at. My mum is 64 and she on the sick benefits because she got really bad arthritis in her hands but she been selling on eBay for years has she has a lot of clothes but she also had a lot of stuff left for my grandparents but now she said she still going to sell stuff that worth a bit like some LPs etc but most other stuff like some of her clothes she going to just through out because it not worth the stress to deal with HMRC or the DWP. I think a lot of people will do that, if it not worth loads they are going to throw it out or donate it.

[555njp]

Agree, none, it has to and will (eventually) come from all traceable online sources. I think we are all waiting to find out the answer as to how this will pan out, but it's still early days so no one really knows.

Martin Lewis mentioned this on his money program two weeks ago, but surprisingly didn't really give any information other than tax rules are not changing, just sales information will go to HMRC automatically but If you're selling your own stuff most people won't be affected. Probably a bit more on his website?

My own experience: I've not sold anything on my private account this year and haven't got near the thresholds on my business account yet, but I'm now only operating part time.
My father in law runs a much bigger operation on here and went through both thresholds by the first week of Jan but thus far hasn't been asked for a NI number. However, he doesn't have a private account so maybe his UTR is sufficient?
My kids don't use eBay at all but sell a few personal bits on Vinted. I told them about the HMRC thing but Vinted don't appear to have done/said anything as they were unaware.
It's slightly different on that platform though in that you are not allowed to run a business on there in the UK (yet) and they seem very strict if you list too much or try multiples etc. Maybe they'll be exempt, I don't know.

[kempseykate]

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@555njp wrote:

Martin Lewis mentioned this on his money program two weeks ago, but surprisingly didn't really give any information other than tax rules are not changing, just sales information will go to HMRC automatically but If you're selling your own stuff most people won't be affected. Probably a bit more on his website?

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That really is all the information needed - and it was good to have it set out clearly rather than all the misinformation in the media.

[ett1954]

@a45heaven  :

"Ive asked before with out a full answer" :

"What will partial information from limited platforms be of of benefit to HMRC? Apart from putting Private sellers into Business status, which ebay ignore." - It is not limited platforms, the law requires all digital selling platforms to report this information no later than Jan 31, 2025 and ongoing thereafter.  That will be information from Jan 1, 2024.  HMRC 'Connect' software links the data from all sources (not just sales platforms - it already does this with your salary, pensions, benefits etc.)

"Has anyone else had an approach from any other platform apart from ebay for plans to request sensitive information to be divulged thru a new Fujitsu system to HMRC?" - This question is frankly scaremongering by certain media.  The software is 'Connect' and has been running actively since at least 2016; it was developed by BAE systems.  Fujitsu provide a cloud database.  Fujitsu are the biggest provider of private cloud databases and have supplied such systems globally for years.  If you have a link showing Fujitsu provides the software for this new data collection I would be great if you could share it.  Other platforms are probably still considering how they should communicate this and implement it effectively.  eBay's rushed communication is ambiguous and has already caused confusion.

"Will none UK based selling platforms be providing the information to HMRC?" - If they are one of the 30+ countries signed up to this initiative then yes they should do.

At the end of the day no genuine private seller should be worried by this.  Even if they go over the reporting threshold it does not mean they will pay tax or lose benefits.  At the most I suspect they will simply have to confirm to HMRC if contacted that they are selling off their collection, unwanted gifts and second-hand items.  Yes, eBay may force someone to change to a business account, but in reality they have no need to now do so as it will be HMRC who determine who is a business.  Let's be honest, there are many on eBay (and I am sure other platforms) who are trading under a private account, or numerous private accounts, either through ignorance or intentionally, and it is they who need to worry.  This forum should be used to at least educate and help guide those who fall into the "through ignorance" category.

[theelench]

"A private seller has no need to open multiple selling accounts.... if they are indeed a genuine private seller."

No need perhaps, but what about the frequently given advice that it is better not to put all your eggs in one basket?

As my sales on ebay have declined over the years, I've become more reliant on ebid to keep selling regularly and dispose of boxes of glass stored in my father's garage.  Did I take photos of them stacked-up there?  No.

Last year has been my best year ever on ebid, with 24 sales.  It was probably my worst ever on ebay with only 13.  Sales on both sites below the thresholds for both numbers and value, but although the value of the combined sales falls far short of £1700, the combined number of sales is over 30.  This will probably look deceptive  to an algorithm simply looking at the numbers.

I don't think it will be able to distinguish that I've been running the two sites in tandem and that an item that sold on ebay may have been "unsold" on ebid for years and effectively the sales on both sites have come from the same 'pool' of items  --  they are not and never have been two separate sets of 'stock' on the different sites.  Again I can't prove that because whichever site they sold on, they would have been deleted from both.

I can see things becoming messy for me when HMRC is able to use my NINO to see all my sales, although I have never done anything other than sell stuff I've had for years and not done anything with the intent to hide any of them.

[ett1954]

@theelench  "A private seller has no need to open multiple selling accounts.... if they are indeed a genuine private seller."

I was referring to multiple accounts on one platform, sorry if this wasn't made clear.

[retro-boy-81]

This may have already been answered in this thread but, why do ebay allow 1000 free listings per month (i think thats right?) if you are supposed to have a business account for trading/business activites?  Surely listing above say 30 items per month would be classed as business activites/trading.

[ett1954]

A very good question, however not one that anybody on here can probably answer.  I suggest you ask eBay.

Try tagging the eBay reps ............ but don't expect a response.

[tommystrezures]

If I knew the answer to that, I would be a millionaire as I would have predicted the 6 numbers in the lottery last night. Unfortunately I don't have the answer for either. 😃

[shinycards1]

In the USA there is a new law that if someone sells more than $600 in a year, the tax authorities' system treats that as a reportable income and automatically sends them a tax bill regardless if whether the item(s) was sold at a loss or owned for years. It is then up to the seller to declare the net profit. I'm not sure what happens if they don't know the original purchase price or argue that it was a personal item.

This proves that the technology is out there to allow HMRC to automate this in the future. It won't be a case of being lucky and falling under the radar or them not having the manpower to keep track of everyone

[gizby]

That technology HMRC commissioned is from Jujitsu, which for reasons I don't need to say cannot be trusted.

[the_book_seekers]

This may have already been answered in this thread but, why do ebay allow 1000 free listings per month (i think thats right?) if you are supposed to have a business account for trading/business activites?  Surely listing above say 30 items per month would be classed as business activites/trading.

It's not just that there can be an up to allowance of 1000 listings a month, it's also that if you're lucky enough to get the 1000 limit and then use that limit - the next month there will be another 1000, and the same the month after that, and so on. This is not private seller listing. Even if the allowance is half the maximum a month it would still be possible to build up to 3000 listings in 6 months. A private seller of stamps or postcards or the like may need a higher number of listings, but for a private seller to justifiably need over a thousand listings has to be a rarity. ebay has been far too hands off in this area.

[ett1954]

Your comments could have been considered libellous if they weren't so funny.

[tommystrezures]

There would be an easy way for eBay to control that  and it only needs a word changing. You have an allowance of 1000 listings that's it.... if in a month you sell say 100 items you have 900 still listed so your allowance for next month is 100. At end of next month you sell only 50 items then allowance is only 50 and so on.

In my view there is absolutely no need for a private seller to need any more.

[cobwebcottage]

And to add, take away the option to open a shop if you are a private seller. Why would you need to?

[tommystrezures]

Yes would agree with that too, i know this is slightly off topic but there are other things too. Private sellers should not have access to promoted listings, coupons, multi buy either.

I am not sure this is the correct answer either, but I would like to see a level playing field for all. One fee for all (private & business users for the sake of this post say 10%) then the mechanism is business users bolt on promoted listings etc a shop and so forth to equate to current costs. The packaging voucher for business users, is not really fit for purpose as the imcumbant supplier has dwindled the range, and not far off doubled the cost. That side of thing I would like to see an enhanced range to include things such as board backed envelopes etc and the ability if you don't use your £10 voucher you can roll it over say for a maximum of 3 months giving you a quarterly £30 spend if needed.

The other bug bear  on these boards are the promotional offers eg 80% off listings. Scrap that, but re introduce it at a much lower rate for everyone including business users, I would be grateful if it was say a 30% off FVF once a quarter on a 100 lots for instance. 

Ebay I dont think grasp the severity of whats been happening, if they do then we as users don't see it, and things I believe do need to subtly change.

[cobwebcottage]

Agreed. I did ask about rolling the packaging voucher over at one of the weekly chats but was told that would not happen.