Crazy and Mis-informed posts by private sellers re Fees

[jere-nott]

Oh Dear. I have read some posts by Private Sellers moaning about eBay Buyers Fees.

Some say they are leaving, some say this is the end of eBay or RIP eBay. What tosh.

eBay is a multi billion pound or $  Global Company. Some (not all) private sellers are so naive. 

eBay has good Customer Service and as long as you are open and honest with them they will treat you with respect and try and solve any issues. eBay (and PayPal) know every trick in the book and a few more too.

However, I sympathise with genuine Private Sellers but I have noticed that a lot of posts are from "Private Sellers" who, clearly, should be Business Sellers.

I am a 74 year old Pensioner selling by stamp collection which I have been collecting for over 60 years and have been a member for over 11 years. eBay contacted me and said that because of my volumes I should upgrade to a business seller, this was because I have bought stamps some I keep some that I don't want a list on eBay therefore by law I am a business seller. I complied - no problem.

I now pay a 36p listing fee and a FVF on sales, again not a problem for me.

Some Private Sellers have little or no business acumen, maybe they are worried about the consequences of upgrading re HMRC. Believe you me it is not all that scary. 

So Private Sellers take a step back and have a think and stop the posting hysteria. 

Just my opinion, always open to constructive criticism and discussion.

[vinylscot]

I'm sorry, I believe you're still wrong, although you do seem to be back-tracking. I think @dch2112011 has put it far better.

You are certainly wrong, as far as eBay's rules are concerned. If you buy items to sell, as far as eBay is concerned, you need a business account. There is no "hobby selling" grey area on eBay, and there is no point where an enterprise "grows wings", and suddenly becomes a business.

[vintique*violet]

I think you may perhaps benefit from reading about " hobby selling" on the HMRC website or give them a call... I am not misinformed at all... if I am then HMRC are too 😉 

Hobby sellers are not traders as such or running a business, I have already explained this. It comes under miscellaneous income and can be declared to HMRC if over the allowance. Hobby sellers are not simply selling  personal items, it could be a service and non profit seeking. 

Capital Gains Tax applies to " assets" sold £6000 plus ( remembering you also have an allowance too) but not always and it depends on the item and value etc. 

It is all on HMRC - sourced from there and other sources. 

Selling personal unwanted items is not trading or miscellaneous income, so they do not need to be included when considering the £1000 trading allowance threshold - UNLESS they are perhaps from a collection and are sold for £6000 as this is an asset i.e perhaps a collection of vintage silver thimbles which has significantly  increased in value ( this is where CGT can apply) 

examples

Libby is employed, but also sells items using an online platform to make some extra money. During the tax year, her total sales via the online platform (before any fees were deducted) were £1,350. Of this total:

• £500 was from selling clothes she no longer wanted (non-trading);
• £850 was from reselling new items that Libby originally paid £450 for, so she made £400 profit (trading).

Libby can use full relief trading allowance because her total trading income is below the £1,000 trading allowance threshold.

This means she does not have to register for self assessment and complete a tax return, unless she has another reason to do so. There will be no tax to pay on any of her income earned through the platform.

Example – Trading allowance partial relief

Roger is employed, but also makes sales using an online platform. He has total sales income for the tax year as follows:

• £250 from selling old toys that his children no longer play with (non-trading);
• £1,100 from reselling new items that Roger originally paid £750 for, so he made £350 profit (trading).

Roger is not able to use full relief trading allowance because his trading income is above the £1,000 trading allowance threshold. This means Roger will need to register for self assessment and complete a tax return.

However, he can use partial relief trading allowance which means he can deduct £1,000 instead of his actual expenses (£750). Roger’s taxable profits from his online trading will therefore be £100.

Roger does not need to declare the £250 from selling the toys.

[vintique*violet]

Not back tracking at all... I have stated clearly.

I never said hobby sellers do not require a business account on ebay, due to their policy which is totally different to HMRC criteria which is for tax purposes under miscellaneous income... unless that hobby grows into a full time business trade and makes more profit...  Although I have mentioned before in other comments that eBay would do best to have different accounts  and fee structure, as there is a huge difference between hobby sellers, micro businesses and actual larger businesses.

[vintique*violet]

The most common type of taxable miscellaneous income that you are likely to come across is hobby income. This is generally income from activity that is not a trade or profession – so they are not self-employed. However, payment has been or is agreed for the service or item. Typical examples of hobby income may include:

someone may receive payments for writing an article from time to time or selling a photograph occasionally
someone may buy and sell items (not of a capital nature), but as a hobby, not with a view to making a profit. This might be the case where they collect items, and occasionally sell items from their collection, or where they buy an item, carry out some work on it, and then sell on.

The above paragraph that  @dch2112011  posted is from the site LITRG ( the low incomes tax reform group)  which I alerted commentators here to a few weeks ago and posted about with information from that site and HMRC. It is all on this board for people to view.  @vinylscot 

[jere-nott]

From my original post it seems I have thrown a hand grenade into this discussion.

eBay rules and the law are two entirely different things. If you buy to resell on whatever platform you are a trader.

HMRC call buying to resell by individuals a "side-hustle" an unfortunate choice of words but their words not mine. Tax free allowance on this is £1000 p.a. Anything over that is taxable and must be declared even if it is a few pounds. A pain in the backside - true - but that is the law. Nothing to do with eBay rules, eBay is not the law. 

[vintique*violet]

I am sorry but I think you are now misconstruing, anyone selling personal unwanted items and holds a private account on ebay are NOT trading as per the definition and criteria by HMRC.

Of course eBay is Policy.

HMRC is legislative laws.

You are incorrect there's no new side hustle ( whether HMRC call it that or not) and no new tax implications... nothing has changed regarding this, over the £1000 TRADING ALLOWANCE may be taxable depending on individual circumstances...and that is what it is a TRADING allowance. Selling Personal unwanted items is not a business and is not taxable unless CGT kicks in regarding " assets"  and is NOT trading as a business... Just because someone is selling personal unwanted items on eBay or anywhere else for that matter, does not make them a trader. I am unsure as to why you keep commenting about this, HMRC criteria is specific. 

[vintique*violet]

I posted the below the other day on another comment to help people,  but unable to find it so posting it again here...it is from HMRC. @jere-nott 

You do not  trade as an individual seller if private and selling personal items..meaning you are not classed as " trading" nor are a trader ...  as confirmed by HMRC.7th January 2025 and reported on X ( twitter) and in the Somerset County Gazette and others. 

The Labour Party government tax department said on social media anyone selling personal items, including gifts, online doesn’t need to pay Income Tax on these.

HMRC wrote on Twitter/X: "You don’t need to pay income tax on selling your own personal items such as used clothes, an old TV, or unwanted furniture. This does not make you a trader."

However, you may need to tell HMRC if you receive income through an online marketplace or social media.

HMRC explains online: "If you’re only selling personal possessions you’ll probably not have to pay Income Tax on these.

"However, depending on the items you sell and how much you sell them for, you may need to pay Capital Gains Tax

"This applies to selling personal possessions where the item is worth more than £6,000."

HMRC said it is working alongside online platforms to ensure sellers receive clear guidance on their tax responsibilities.

HMRC message to eBay, Airbnb and JustEat online sellers:

People selling unwanted items online can continue to do so with confidence and without any new tax obligations, HM Revenue and Customs (HMRC) has confirmed.

Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive Officer, said: “We cannot be clearer – if you are not trading and just occasionally sell unwanted items online – there is no tax due.“As has always been the case, some people who are trading through websites or selling services online may need to be paying tax and registering for Self Assessment.”

Edit to add image as had difficulty...

[wintersdawn1]

As a private seller the below is the only part I refer to, the flowchart link is pretty good too:

• If you are selling unwanted personal possessions such as old toys or clothes, this would not be classed as trading or miscellaneous income, and there is usually no tax to pay. In some circumstances there may be capital gains tax when selling valuable items such as jewellery, this is covered in our flowchart.

There is no new tax and selling unwanted personal items as a " private seller" is not subjected to the HMRC £1000 trading allowance, as there is no trading nor business activities, however they may be subject to Capital Gains Tax if of high value and a profit has been made.

Do I have to share information with HMRC?

From January 2024, new UK digital sales reporting rules require digital platforms like eBay to share information with them. However, this reporting doesn’t change your tax obligations.

On eBay, this should only affect newly registered accounts in 2024, which will extend to all accounts in 2025.

eBay will only report if you pass certain yearly sales thresholds:

• If your total sales on eBay exceed €2000, or roughly £1740, after fees.

• If you complete 30 or more sales transactions on eBay.

In general, selling personal items is not taxed if they’re below £6,000 and you’re not selling as part of a business.

[vintique*violet]

@wintersdawn1  THANK YOU... I was just looking for my old posts regarding this and only found one that I had saved to re-post... you are a blessing for saving that and posting again to help others. 

😉Have a lovely evening. 

[wintersdawn1]

I saved it from one of your previous posts, so thank you 🙂

[dch2112011]

A couple more snippets for you to enjoy 

'HMRC introduced it as a tax free allowance to cover “self-starters” with small, hobby-based businesses. It means that you can earn a total of £1,000 from self-employment in a tax year, before you even need to report it to HMRC …'

'Income from a hobby is not taxable. But if your hobby becomes a business the income is tax exempt unless it exceeds £1,000 in a tax year. When working out income you can ignore any costs incurred in generating it. The value of any gifts you receive must also be taken into account.'

[dch2112011]

The quote you refer to was not taken from the LITRG - it came as an extract from an article of an interview with a director of a very well known firm of chartered accountants  - whether LITRG have the same quote or something different I have no idea.

LITRG has masses of pages devoted to trading allowances some similar some not so similar

But hey who plagiarises who is fairly irrelevant isn't it ?

[theelench]

Can you clarify please.  

Are you now selling your whole 60 year old collection, a personal possession, on a business account?

Or are you just selling the stamps you bought but did not want to add to the collection, after taking out those you did want to keep on the business account?

The Badges of Trade make it clear that buying a 'job-lot'  of stamps in order to add some to your collection is not trading unless you're doing it on a regular basis.  The frequency of such buying and selling is taken into consideration.   

[equinox-electronics]

Remember Capital gains tax is for 1 asset not multiple. And it's been reduced to 3k iirc 

[vinylscot]

I think we all know the rules, but I also believe @vintique*violet is badly muddying the waters by introducing the term "hobby sellers", with all its connotations.

In the excerpts you post, "hobby selling" refers to selling arising from a hobby., e.g. selling your old fishing rod, or duplicate beanie-babies from your collection, or selling "expertise" related to the hobby (an interview, photo, etc.) . It does not mean "selling as a hobby". As soon as you are "selling as a hobby", as opposed to "hobby selling", you are using up your £1000 allowance, and you are (or should be) a business seller on eBay.

There is a distinction, particularly in eBay, and you know that perfectly well, but you seem to be ignoring it with your current posts.

There is no interim state of "hobby seller", in between private and business sellers. 

As we all know, private sellers selling their own unwanted items, are not, generally, subject to tax on these sales. However, private sellers buying to sell ARE taxed on sales of these items, although there is a trading allowance of £1000 of turnover, before such tax becomes due. In effect, that gives new or infrequent sellers a little headroom, before they need to worry about tax, but it does not introduce a new "hobby seller" category.

Some posters here should realise it's not actually necessary to post on everything, particularly when they are pretty unclear about the subject at hand. They tend to create more problems than they solve.

[andha-21]

No eggs in this basket, just trying to understand it.

But what I'm reading is the distinction between what HMRC etc class as a business and what eBay does.

But eBay aren't a legal sovereign power, so hypothetically if part of what they are saying is incorrect why does anybody have to follow that part?

I know about terms and conditions etc but if the contract is legally incorrect you don't have to follow it and you can challenge it.

[lucy_farmer]

'....so hypothetically if part of what they are saying is incorrect why does anybody have to follow that part?'

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Because ebay is a business, not a public service.  (i.e. no body has a right to use it)

Basically, it's their game, their ball and their rules. If I we don't follow their rules, they can tell us to get off their pitch.

'.......terms and conditions etc but if the contract is legally incorrect you don't have to follow it and you can challenge it.'

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Yeah, you could challenge it.

But I don't know anybody with the sufficient clout or money to take on a behemoth of a Multi-National tech corps like ebay.

That's not defeatism; that's realism.......

[andha-21]

@lucy_farmer 

I'm not talking about individuals challenging them. That would be ridiculous. But we have 2 legal authorities in this country that both have remits to cover the above.

As big as eBay are, if either or both of those come knocking at their door they'll have to have rethink.

They won't be worried about fines, obviously. But if they get the equivalent of cease and desist letters that could kill the programs.

[lucy_farmer]

'....but we have 2 legal authorities in this country that both have remits to cover the above.'

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I'm not sure the political climate (national or global) is conducive to tackling any tech mega-corps.

Governments the world over can't stop other tech companies doing far far worse;  Like broadcasting content that encourages children to kill themselves or each other / give themselves anorexia / be groomed by a***holes,  or any other horrific garbage, they're not gong to be able to stop ebay making more money in a sneaky fashion.

(yes, I'm a gloomy defeatist who hates the modern world! 😫)

[vintique*violet]

Thanks for your post @vinylscot everything I have posted comes from research and is from HMRC and LITRG - plus speaking directly with HMRC... there is no confusion between hobby selling and " hobby sellers"... you have made that distinction and we all know that buying to sell for a profit is trading and I have never suggested otherwise, and have stipulated that personal items are not necessarily subject to tax or are known as traders AND  have suggested people to research for themselves on HMRC and the LITRG platform ... they can also look at eBay for information too as they make it clear also... so if you have an issue in the " differentiation" contact them please instead of trying to call me out as I have not provided anything other than from those sites and certainly not muddying the waters. 

I think that you and @jere-nott are trying to misconstrue and have got private sellers v business sellers masquerading as private sellers mixed up  in ebay policy and what is necessary for tax purposes. 

Not everyone on any selling platform are trading because not everyone is buying to sell for a profit... selling unwanted personal items is not classed as" traders " as confirmed by HMRC ( posts on this are numerous) whether they have a private account or a business account ( often you see those on business also selling a personal item and that is up to them to distinguish for accounting purposes) 

And not every " hobby seller" is a business or classed as a business and as I have pointed out before it is up to anyone who is " hobby selling" to contact HMRC themselves to clarify their circumstances because everyones situation is individual to them. Hobby selling covers a multitude and can be a service and not just items., even gardening is included. 

As for no interim state between private and business... this again shows that you are confusing the situation moreso... that is for eBay policies to determine - nothing to do with tax implications or if required to register as self employed or to complete a self assessment ( which are two different things entirely) self assessments can be completed without being registered as self employed , as it comes under miscellaneous income! 

Perhaps it is best for anyone concerned to clarify for themselves as they know their personal circumstances and to use discernment when reading any posts/comments. 

Thank you.