Confused over needing NI number and allowances

[jrd-games]

My non-related business *completely* died in May last year but I still had a huge tax bill from the previous tax year to pay off, so resorted to selling off a lot of my prized possessions on eBay to soften the blow.

Today, I just got a notification about supplying my National Insurance Number to eBay. 

Have seen conflicting info. One thing was saying I should be paying taxes as the sales did cross the £1700 threshold, but a page on the HMRC site says I don't need to as I was selling my personal possessions below 6k. What to do here?

To be honest, the platform is now absolutely *awful* to use as a private seller so was just thinking of closing my account anyway.

[alfifletch27]

No problem

Sent from my iPhone

[tegeus-cromis]

Not just low, but absurd. Thirty diamond rings or thirty trading cards? It's a completely meaningless metric.

[lucy_farmer]

'Thirty diamond rings or thirty trading cards? It's a completely meaningless metric.'

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I agree with you there! It's a bit silly.

A financial limit, yes, fine.  After all the whole business is about finance in the first place.

(ebay didn't make up the daft metric though : neither did HMRC. Some bright spark in the OECD thought it up. Which is why the more logical financial limit is a slightly strange £1750. 'ish. This translates to about  2000 EUROS)

[ett1954]

The financial limit is set to €2,000 because the currency used by the highest number of members is the Euro.

The reporting parameters (calendar year) are set because other members use the calendar year as their tax reporting year.

The transaction number level is set to cater for those economies, e.g Costa Rica, Chile and Mexico; that are developing and where monetary value does not equate to that in the more 'developed' countries.  It is envisaged that more Caribbean and South American countries will be joining the organisation.  People have to stop looking at this from just a UK perspective.

For info. the current members of the OECD are:  Austria, Australia, Belgium, Canada, Chile, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.

[srp_8864]

Why don't eBay deduct postage costs paid to post office  and only fees when calculating the amount of sales. Looks like they are only reporting the information they choose.

[cassidy_r_private]

The item price is the total price including shipping as paid by the buyer. This is your turnover or gross sales.

Then the taxable element is calculated by removing the actual cost of the shipping and transaction fees (and any other tax deductable overhead).

When reporting to HMRC, it's up to the seller to do the mathematics.

[srp_8864]

Ok thanks for responding.

Did say in guide they deduct from the full figure money paid for an eBay shipping label which not everyone uses.

[cassidy_r_private]

Call me cynical but I'll be checking my own records against any that ebay have disclosed to HMRC 😉

[wintersdawn1]

I'm not sure how ebay arrive at our actual money received, hopefully it will be minus fees etc.

[jckl1957]

They do state what information will be in the 'digital sales report':

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

Total number of transactions and total amount paid or credited to the seller during each quarter of the calendar year, excluding*:

• Shipping amounts paid to eBay
• VAT collected and remitted by eBay
• VAT charged on fees
• Amounts deducted by eBay for fees, coupons, cancelled or deleted orders
• Returns 

* Consequently, the amount eBay reports may differ from the total amount of payments you actually received from eBay.

[papso22]

I've often wondered if HMRC has agreed that is how the figure will be calculated. 

It feels understated to me.

[tonnesofstuff]

What happens if one has vast collections of comics and records collected over the years that number in the thousands and they decide they want to sell them?   Are there limits to that (apart from the £6k for one item clause that was mentioned)?

[tonnesofstuff]

Also, would it be worth photographing them as proof?

[wintersdawn1]

Example — selling unwanted items

You’re clearing out your attic and decide to sell your unwanted items using online marketplaces. None of the items you sell are worth more than £6,000.

It’s unlikely that you’ll need to tell us about this income or pay any tax, no matter how many items you sell.

https://www.gov.uk/guidance/check-if-you-need-to-tell-hmrc-about-your-income-from-online-platforms#s...

[tonnesofstuff]

Thank you.

[byclickingsubmit]

so if I have to pay tax due to this new rule. Could I not claim expenses or offset this I.e £500 a month for rent for where the cards are stored and also an expense of at least 20,000 on staff cost. These eBay orders don’t walk themselves to the post office lol Can I not also claim vat back?when I purchased the items vat was applied? 

[cassidy_r_private]

Yes, if you are trading you can offset your expenses.

They have to be reasonable.  There are guidelines. If you rent your garage to yourself for £500 a month, that means you are earning £500 a month as well, which is of course, taxable. You can claim a small amount back for usde of home as office. Make it a shared space with personal posessions so you don't get dinged for business rates.

Speak to an accountant, or at the very least HMRC.

You will pay tax on your earnings after expenses.

Wages are only a taxable  expense if you employ someone else, pay employer's national insurance, decuct and forward their taxes etc.

You can't claim the VAT back unless you register for, or are registered for VAT.

[lucy_farmer]

'Yes, if you are trading you can offset your expenses.'

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Absolutely.  And keeping basic books is very easy..

But the poster you're replying to, is on a private account.

This is a statement that he is *not* trading.

HMRC probably  wouldn't care or put two and two together, as yet.  (because that's not *their* job)

But as soon as any other official trading standards or consumer law bodies get their computerised hands on all this lovely aggregated data from everybody (and I'm fairly certain 'mission creep' will eventually allow that), they will start 'caring.'

[*vyolla*]

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@byclickingsubmit wrote:

so if I have to pay tax due to this new rule. Could I not claim expenses or offset this I.e £500 a month for rent for where the cards are stored and also an expense of at least 20,000 on staff cost. These eBay orders don’t walk themselves to the post office lol Can I not also claim vat back?when I purchased the items vat was applied? 

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If you rent some premises solely for storing your cards then you'd be able to claim, you'd need proof of that rental because somebody else will be paying tax on that income. It would need to be realistic as well.

You can claim your £20k staff cost if that's what you're paying for staff and you can prove it. Of course, that income to them will be taxable so HMRC will require names and addresses. 

You can only claim VAT back if you're VAT registered.