Being asked to upgrade to business account

[seraphims_odditorium]

Hello, 

this is my first post so please be kind. 

just looking for advice please.

Today I received an eBay email stating : 

“

Your selling activity indicates you’re operating as a business seller.

In order to comply with government consumer protection legislation, we ask that you upgrade your eBay account to a business account in the next 30 days. If you don’t, your account will be subject to selling restrictions, as outlined in our Business seller policy.” 

but I am not & have never been a business seller. I have sold our junk basically!  - unwanted kids toys, clothes etc etc  & more recently some of my late father’s items (he collected film memorabilia). 

at no point have I made or purchased any items to sell as a profit. So I’m not sure why this is happening or what to do ? 

[lucy_farmer]

I'm pretty dense about tax things and 'Ben' is freaking me out a bit.......

Is his collection of Trading Cards his personal stuff? If so, why has the word profit got anything to do with it?

'Grace and Claire's' stuff is their own personal belongings, so no 'profit'. Why is that different to 'Ben's ' stuff?

(Please somebody tell me what the big, blindingly obvious thing I'm missing is!  😵)

[game_raid]

A collectors items may or may not increase in value that's all it is.

They were not initially bought to resell.

[vintique*violet]

Are you speaking to yourself?  😉 

[ett1954]

"I would love to know how those figures were determined... many private sellers could sell far more than 30 items a year especially if they are clearing their home prior to the sale of a property or a bereavement etc." - It is nothing to do with HMRC directly.  It is international agreement by the 38 countries of the OECD, designed to identify revenue gained by criminal enterprises such as drugs, trafficking, money laundering, etc. etc. being transferred across national borders.

Online platforms are one of the primary conduits enabling these activities in a digital way.  Each of the countries is committed to have money earned through digital platforms of all types reported over these agreed levels by individuals and businesses monitored by their respective tax authorities.  Individuals are identified by their respective TIN (Tax Identification Number) with the information shared between all 38 countries to enable 'money-flows' to be identified and investigated as necessary in an effort to identify the perpetrators.  Tax evasion is just one of those criminal activities, and almost certainly not the one at the top of the list.

HMRC are simply the organisation in the UK responsible for implementing and managing the UK's part of this agreement.  Individuals selling off their household goods are not going to be in their target.

[vintique*violet]

😉 

Collectables can go up or down in price... 

Some people "invest" in collectables or may have purchased them years back and they have increased ( or lost ) value... 

So Ben had a " collection" of cards ( I think maybe using  the term " trading cards" is confusing)  so think of them as Pokemon or a collection of  Royal Doulton figures.. these were his personal " collectables"  not purchased to re-sell,  perhaps owned for a number of years, but maybe times were hard and he decided to sell them on.. luckily he made a " profit" because they sold for more than he originally purchased them... they are his personal items and with his capital gains allowance has no tax to pay... lucky Ben 😉  

Grace is selling her own worn pre-loved second hand clothing... she isn't a trader or trading or running a clothing business specialising in second hand clothes, she is simply selling her personal items...

Edit.. spelling.. 

[vintique*violet]

Thank you @ett1954  I wondered if it was to catch those on benefits and undeclared income, but this makes more sense... and has " filled in" a lot of gaps 😉 

Appreciate the information. 

[game_raid]

I don't know how true this is so don't shoot the messenger but a friend who runs car boot sales has told me that HMRC officials are going to start inspecting looking for traders who may not be declaring their tax.

I guess the same will apply, if you are selling your unwanted items they won't be interested but a stall full of brand new items at qty may get looked at.

[lucy_farmer]

'Luckily he made a " profit" because they sold for more than he originally purchased them... they are his personal items and with his capital gains allowance has no tax to pay... lucky Ben 😉  '

So even though these are his own personal items , he *can* balance his outlay when he bought them, against his income when he sold them, even though this is not a business activity. And HMRC would be perfectly happy with that provided he kept all his receipts....

(Grace and Claire are perfecty understandable 😀)

[papso22]

The last 20 or so posts feel like the posters are speaking different languages!

There is no generally recognised term of 'legitimate business'. 

Businesses can take a number of legal forms all with different regulatory requirements. 

Sole traders, limited companies, partnerships and limited liability partnerships are all businesses.

As for bank accounts, current is simply different to deposit, and there are private current accounts and business current accounts.

[1956glyn]

Around where i live HMRC........Trading Standards and the Police and Job Centre (or whatever they are called nowadays) have been trawling around the boots for years.

They will defo be interested if someone is doing a boot/market every week and claiming benefits...as its undeclared income.

[vintique*violet]

The last 20 or so posts feel like the posters are speaking different languages!

There is no generally recognised term of 'legitimate business'. 

Businesses can take a number of legal forms all with different regulatory requirements. 

Sole traders, limited companies, partnerships and limited liability partnerships are all businesses.

As for bank accounts, current is simply different to deposit, and there are private current accounts and business current accounts.

I agree businesses can take on many forms and some that believe you are running a business are completely out of touch,  as eBay are with many private sellers, even though they are " trying" to comply with " their" legal and term(s) requirements or " using them" to push people to upgrade...

Legitimate businesses would be registered with HMRC or should...

"Legal" being the operative term... as in " legitimate"

legitimate /lə-jĭt′ə-mĭt/

adjective

1. Being in compliance with the law; lawful.
   "a legitimate business."
2. Being in accordance with established or accepted rules and standards.
   "legitimate advertising practices."
3. Valid or justifiable.
   "a legitimate complaint."

Bank accounts - please research what is best for you and what your bank allows. 

If you are not trading you do not need to register with HMRC or eBay as a business...it is that simple.

Edit ... spelling.  

[game_raid]

Trading standards raiding one by me not so long ago and from what I heard they confiscated boxes and boxes of electric blankets that were cheap chinese imports that were not deemed safe to use.

Quite scary really and all for the sake of making a few quid, not caring about the end user and the danger they may be put in.

[papso22]

Capital Gains Tax is not a business tax.  It has  nothing to do with 'income' either.  It's a tax on the sale of personal possessions when the relevant conditions are met.  

What concerns me about Ebay's example is that it lumps the collection together as 'an asset' when I think HMRC would be looking at each card individually. 

[ett1954]

I have only done a few car boot sales and I haven't done one for at least 15 years but I was approached by two people at one large one I did and asked if I was trading which I confirmed I was.  I believe that one was Trading Standards.  They asked if I had ID with me and fortunately I had my driving licence.  They checked it and made a call presumably to check I was registered with HMRC before giving me it back.

All this time a few people further down the line were frantically throwing items into the back of vans to which I couldn't help laughing.  One of them said to me "don't worry we were around earlier, our colleagues will be seeing them at the exit."  The only time I have encountered this, and never at a book fair; but saying that I only ever did around half a dozen boot sales.  But it shows they were checking even 15 or more years ago.

[vintique*violet]

Not his income , they are classed as an  " asset" so capital gains could apply.  

[8and1tz]

Hi,

All the private sellers who helped get eBay started are now getting a "thank you".

Making you wait for payment on confirmation of delivery. Open to scammers.

What happened to protecting private sellers.

At the moment there is a "glitch" where tracked Royal Mail parcels are not

being updated on the dashboard. Its one thing after another with this bunch of cowboys.

Regards

[vintique*violet]

@lucy_farmer if you look up capital gains tax and assets on HMRC site it will help you maybe to understand a bit better... it can be confusing. 

[lucy_farmer]

Sorry to keep harping on about this 'collections' thing, but....

I thought Capital Gains Tax was for one large sale?

Does this 'Ben' example mean to say the collection was sold as one large lot? In which case I understand perfectly.

Or is 'Ben' allowed to sell his collection in lots of little sales, in which case......in which case I still don't understand it !😕

(I know I should ask somebody at HMRC itself, really....... but the thought of sitting on hold for 45 mins puts me off..!)

[vintique*violet]

https://www.gov.uk/capital-gains-tax/what-you-pay-it-on

The above gov link may help. 

[*vyolla*]

---

@lucy_farmer wrote:

Sorry to keep harping on about this 'collections' thing, but....

I thought Capital Gains Tax was for one large sale?

Does this 'Ben' example mean to say the collection was sold as one large lot? In which case I understand perfectly.

Or is 'Ben' allowed to sell his collection in lots of little sales, in which case......in which case I still don't understand it !😕

(I know I should ask somebody at HMRC itself, really....... but the thought of sitting on hold for 45 mins puts me off..!)

---

Ben, London

Ben sells his collection of trading cards for a profit. Even though he receives £18,000 and makes a profit of £2,900, he has a capital gains tax-free allowance, so there is no tax.

Annual eBay sales: £18,000

Annual eBay profit: £2,900

Taxes owed: £0

The example given above shows that Ben sold his collection i.e. in one lot, so it's like one item.

Of course, in real life Ben will need to show receipts for that collection that show that his profit on the £18,000 sale is £2,900. With no receipts it's likely that he'll pay full CGT on that sale.

Ben can sell each card individually, if the collection looks like it will sell for top dollar and become liable for capital gains then that would be a better move.

Same if it's a collection of jewellery, collectable pottery pieces such as Troika etc and they're sold in one lot as a collection.