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

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-...

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

Can't be a bad thing can it?  At the very least it should lead to fewer interrupted threads 😀

 

I'm sure "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...".

 

And not just the blatantly obvious ones with (for example) 10,000 CDs for sale year after year on a "private" account.  But also those who've been a little cleverer, registering a "struggling" business selling low value goods and making little profit.  While having a rarely mentioned private account trading in (say) high value collectables, also for years.

 

Presumably ebays reporting will be in a format that will make it easy for HMRC to link all accounts held by the same person, whether business or private, selling, buying, posting and even kudo-ing?  For whenever anonymity is on offer, abuse will follow using its protection, so I think there might be some surprises when it comes to which sellers "retire" before this comes in.

 

 

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

Many thanks for the shows of support, I’d just like to make a few further points.

 

The Daily Mail article states that HMRC has earmarked £36.69 million, including 24 full-time staff, to enforce this new measure.”  Where has that money come from?  Taxpayers. This means of course that HMRC now has to recover £36.69 million before they can effectively break even.  Given that need for a result they’ll no doubt use draconian measures during their “clampdown” and that’s putting it mildly. This will assuredly delight some of the ‘I hope-they-throw-the-book-at-them-bring-back-hanging’ brigade present on this board. But who precisely will HMRC be clamping down on? What type of person?

 

Ask yourself this simple question:

 

Which of the following types of individuals, as per the Daily Mail / HMRC, are most likely to be using eBay as a ‘side hustle’?:

 

A) One of the thousands of Porsche driving, Rolex wearing shysters looking to earn fat stacks so that they can have a fourth holiday in the Bahamas during the current tax year

 

OR

 

B) One of the thousands of ordinary people that are slaving long hours in a minimum wage job trying to make ends meet in a chronic recession just so they can heat their homes this winter.

 

I think - if a moment of thought is given - we know the answer. The Posche drivers are imaginary whilst the ordinary people are all too real.

 

It has been mentioned by another poster that every 4 or 5 years there’s a HMRC eBay clampdown.  It’s no coincidence that every 4 or 5 years there’s also a General Election because nothing plays better with an electorate than a bit of ‘Hammer The Tax Dodgers!’.  Lo and behold, surprise surprise, we currently have a government looking like they are about to lose a landslide election in 12 months time and they’ve just had HMRC announce a tax clampdown.  Only on the most vulnerable. easily traceable people will be targeted though obviously. We wouldn’t want to upset the fat cats living in their seemingly unlocateable ivory towers now would we?

 

I also note that there are fellow media Sellers voicing their opinions.  Perhaps they ought to save their ire for the Music Magpie / Momox’s that have devastated the value of media with their ‘buy in bulk, sell in bulk, cheap as chips’ approach that small Sellers can’t hope to come close to competing with.

Buyers now also fully expect free P&P as part of the deal and where have they been taught to expect that? The Music Magpie / Momox / Amazon’s of this world that are big enough to broker cheaper postage deals with the Post Office directly or, in the case of Amazon, simply by having their own massive delivery fleet.

 

If people still want to insist that eBay - eBay of all places! - is the home to Porsche driving, Rolex wearing shysters then I wish you good luck, there’s no reasoning with you. The amount of effort required to list and fulfil orders on eBay has to be one of the lowest risk to reward ventures you could hope to take up and imagining that it’s an effective way of cheating the tax man whilst making a fortune as a consequence is beyond delusional.

 

Please try aiming any anger at the hidden people that work at the top of tax-evading / dodging corporations and not the easy, most vulnerable targets deliberately placed directly in front of you by people with vested interests in feathering their own nest via supporting the status quo.

 

Thank you and best wishes.

Message 22 of 904
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Are your taxes in order? eBay now sending sales data to HMRC

Someone's angry on here and it isn't me.  The only 'them and us' feeling from me is those that willingly pay their taxes and those that don't.  I currently fund those that don't pay taxes wether they're rolex wearing shysters as you say or the multitude of smaller scale tax dodgers that all add up... they can all pay up as far as I'm concerned. 

 

Your attempts at justifying wrongdoing by claiming that other people do it worse is childish.  Take responsibility or go and live in a tax haven.

Message 23 of 904
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Are your taxes in order? eBay now sending sales data to HMRC

My point is that a basic state pensions is NOT EARNINGS - but counts as earnings for tax purposes.

 

Additionally, DWP does not treat pensions as PAYE, hence no P60s.  And thus, having received the pension, having to repay it in tax the following year!

 

The basic state pension is SUPPOSED to be a benefit, or so we have been told over the past few years, it was supposed to be an entitlement which I've paid for in advance for, in my case, 54 years.  Whether entitlement or benefits, its not earnings - nevertheless is treated as earnings, thus taxable.

 

Which means that, even for people who have no earned money coming in, the basic state pension in a couple of years looks likely to be over the basic tax threshold (unless they keep jumping the threshold ahead of the maximum basic state pension) and tax clawed back the following year. 

 

I'm a pensioner and also employed, so I have not problem with paying tax on my earnings - I do though think I am in a very priviledged position that I can work - though slightly narked that we if spent all our savings and gave the house away we would be a lot better off doing nowt that I am working 80 hours plus a week at the moment!

 

But there are many living on just the basic state pension - and indeed many living on the low rate state pension.  An 8.5% increase on a pittance is still a pittance, but to be given a benefit in one hand and the prospect of having some of this taken back a year later is, to my mind, rather uncaring.  I step out of the argument of well off pensioners who have good private or company pensions, I fell foul to a company going bust and owing me a fortune, which took cashing in my private pension to avoid bankrupcy, though I can remember the pain of having to  make choices about spending money on my pension or essentials.

 

 

Message 24 of 904
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Are your taxes in order? eBay now sending sales data to HMRC

w-steve great piece. These new HMRC jobs are obviously targetted at those that want to work from home and ride a keyboard. What is the tax situation of all the Chinese sellers with multiple accounts selling out of various UK warehouses selling the same tat.  The most surprising thing about this story is the aspiration to sell over £1k of goods that arent de cluttering, deceased clearance, combined famiy collections etc.

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

Well said.

Message 26 of 904
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Are your taxes in order? eBay now sending sales data to HMRC

If a genuine private seller is selling unwanted electrical or IT equipment they could easily reach the £1000 threshold and will have to declare to HMRC. It'll put them off using eBay. Most charity shops don't accept electrical items. I wonder if the government has anticpated this could have an effect on landfill. eBay plays a major role in recycling.

 

I appreciate the majority of private sellers are unlikely to make £1000 in any one year selling low cost items for the purpose of de-cluttering, but some items are expensive, and people don't want the hassle of tax self-assessment for small bucks when it's not their main source of income.

 

Another thing which crossed my mind, although I'm no epxert in this area, is the impact this is going to have on the car industry if people sell their car privately on ebay? More specifically the classic car industry where the cars are few and far between and they can't be sourced locally.

Message 27 of 904
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Are your taxes in order? eBay now sending sales data to HMRC

No right-thinking person would buy a car on eBay - it is a category full of scammers and not covered by eBay's guarantees.

Message 28 of 904
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Are your taxes in order? eBay now sending sales data to HMRC

I'm also a pensioner and totally agree with you, the fudging of a paid-into state pension scheme is not earnings or a "benefit", it's a National INSURANCE payout.  Is there any other insurance payout that is taxable?  Not that I know of.

My (lower rate) earlier version of the state pension is further reduced because I took the (then) govts. (bad) advice to Contract Out of Serps and put money into a private pension pot.   Many years later, when it was time to pay out they sent me a cheque because it hadn't grown enough to buy an Annuity with any pension income!!

 

Now 70, I get a reduced state pension, have a small works pension and still do a cleaning job.  Both of the latter are taxed.   When, because of the Triple Lock, I had a 10% raise on the state pension, the tax on my other income was also heavily increased by a consequent lowering of my tax code, which clawed some of the increase back.   As is some of my savings income because of the frozen threshold on ISA savings (and the frozen PA on all income).

 

I'm not at all surprised that there is growing anger when some of the better off think it is right to crack down on the least well off (or perhaps they should move to a tax haven) when it's them that make those "difficult decisions" about who should heat or eat.  While at the same time off-shoring their assets, declaring themselves non-dom, or if they're billion £/$ corporations "negotiating" how much tax they'd like to pay.

Historically it's a demonstrable fact that tax evasion always increases whenever the tax burden is seen as unfairly falling on one section of society while only lightly falling on another and it's certainly doing that at present.

Message 29 of 904
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Are your taxes in order? eBay now sending sales data to HMRC


@gizby wrote:

If a genuine private seller is selling unwanted electrical or IT equipment they could easily reach the £1000 threshold and will have to declare to HMRC.


No, they won't. The £1,000 threshold is a trading allowance - it only applies if the person is selling as a business; i.e. they bought the equipment with the intention of selling it to make a profit. If it is something the seller already owned and they are selling it because they've upgraded their equipment then they don't need to declare it.

 

As mentioned earlier, nothing will change other than perhaps enforcement happening quicker. HMRC's "badges of trade" guidance determines what they consider to be trading activity. 

Give me ambiguity or give me something else.
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Are your taxes in order? eBay now sending sales data to HMRC

hubby said to me today he heard on the news that in the new year theyre cracking down benefit fraud and looking into claimants bank accounts and transactions to question where any extra money was coming from, ah i thought of this post and how it all ties in as there must be lots of ppl who are on Ebay (etsy, deliveroo, just eat etc) who are claiming benefits and topping up on with these other income sources and not declaring it so it wont be just a case of the tax office looking for undeclared tax but many may find their benefits stopped too (or charged with benefit fraud).  Alot of people will be in for a shock with this next year.

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

And where will the extra cost come from for the extra people to deal with this? HMRC are a nightmare to contact now. I don't think they will be bothered about the minnows, too expensive for too few returns.

 

When I was asking how I went about becoming a business/self employed, buying to sell, some years back, a very snooty lady at HMRC (when I finally managed to get through), told me, 'We have far more important things to deal with than you making 50p on an item you bought at a boot sale'! I thanked her nicely, then rang again and got someone who knew I should be declaring it. (And fortunately, it was usually way, way more than 50p profit!)

Message 32 of 904
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Are your taxes in order? eBay now sending sales data to HMRC

Surely it would have been easier to call your accountant - always assuming you have one?

Message 33 of 904
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Are your taxes in order? eBay now sending sales data to HMRC


@iew-signed-books wrote:

Surely it would have been easier to call your accountant - always assuming you have one?


As I was ringing HMRC before I became self employed/a business, no I didn't have an accountant.

Message 34 of 904
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Are your taxes in order? eBay now sending sales data to HMRC

Sorry for sounding annoyed but this does seem below the belt. 

I rekcon many thousands of current small time ebayers when they get earshot of this "Supercomputer tax purge" from 1st January 2024 on ebay & others similar are going to stop and cancel their sales listings during December 2023 and never return but just keep the accounts for buying only. For these sellers if tax demands are sent will be made to feel like criminals.

So everyone loses including paying ebay seller fees no longer being paid & the only winners are the tax men who will enjoy ruining businesses.

The majority of these sellers are truly endeavoring to make profits via buying & selling and why not, isn't that not a bad idea when a big percentage of workers are on minimum wage or on pittance pensions etc most sales are small profits but will add up over years, for all the time and efforts involved and then end up paying taxes defeats trying & the interests in doing so. This will be damaging to ebay and the 1000s of sellers who no doubt will abandon.

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

and my view is.....if members have nothing to hide then they will not be concerned

 

I am sorry but we do not have a choice as to whether we pay tax on earnings in the UK.......

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


@blackandwhitethunderbird1959 wrote:

 

The majority of these sellers are truly endeavoring to make profits via buying & selling and why not, isn't that not a bad idea when a big percentage of workers are on minimum wage or on pittance pensions etc most sales are small profits but will add up over years, for all the time and efforts involved and then end up paying taxes defeats trying & the interests in doing so. This will be damaging to ebay and the 1000s of sellers who no doubt will abandon.


If they're business sellers trading as private sellers then the reason why not is because they're not trading correctly.

 

They get final value fee promotional offers and don't have to pay for their listings, or the extra VAT. They can then afford to undercut the business sellers who don't get promotional offers, have to pay for their listings plus VAT.

 

If tax is due why should they not pay it? 

 

You can offset a fair bit against the tax you need to pay if you're a business seller. 

Message 37 of 904
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Are your taxes in order? eBay now sending sales data to HMRC

"I'm sorry but we don't have a choice as to whether we pay tax on earnings in the UK....."

 

So am I, but what a shame that HMRC isn't as rigorous about extracting the correct amount of tax from ebay.uk  --  the corporation, instead of letting it funnel far too much 'off-shore' thereby robbing the UK tax system of very likely far more than delinquent "private" sellers do.

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

Thank you, that's a useful link.

Message 39 of 904
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Are your taxes in order? eBay now sending sales data to HMRC

indeed, the tax mans only interested in the ppl they can get results from cost V reward but if there are ppl sat on benefits eg £14k then earning £10k (not paying tax)  on ebay they arent encouraged to find a job or go self employed. 

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