Do I need a business account for a "quick" flip?

[happyshopper1982]

Every once in a while I stumble across a job lot of something worth attempting a "quick" flip. "Quick" in inverted commas as there's nothing quick about selling on eBay these days! 🙄

Years ago eBay insisted I upgrade my Private account to Business because I bought a job lot of identical Brand New in box perfumes I wanted to flip for a quick profit. I believe their rhetoric was I can't sell more than one of the same item without a business account - from recollection there were 30 bottles and I made about 1200 after costs. Unbeknownst to me, I was then penalised to the tune of hundreds ££  in unnecessary fees for using the business account when legitimately selling my unwanted items in the 5 or 6 years that followed. Since realising I could run both a private and business account concurrently I've used the private account set up in 2022 for the entirety of my eBay.

Recently however I've just purchased a job lot of ink cartridges (£1k worth) and intend to sell these for a profit. As I don't want to jeopardise a forced upgrade on my private/personal account I intend to use the old business one.

Question is: Do I automatically have to declare this trading income via a tax return regardless of the net outcome? As for all I know I may even make a loss. As I'm not and never have been a business seller, it's purely a one off trade. And secondly is there anything to stop me using my private account for a one off casual trade that will almost certainly leave me below the trading allowance after costs.

[roger_roger_over_and_nowt]

"I've just purchased a job lot of ink cartridges (£1k worth) and intend to sell these for a profit"

https://www.ebay.co.uk/help/policies/selling-policies/business-seller-policy?id=4710

[happyshopper1982]

That doesn't answer my question. It's not a business if it falls within the tradable allowance.

[ett1954]

"Do I automatically have to declare this trading income via a tax return regardless of the net outcome? " - if your income from the sale (including postage costs etc.) exceeds £1,000 then yes you are required by law to register the income via a self assessment.

[*devils.advocate*]

A trading allowance can only apply to a trader - in other words, a business?

[happyshopper1982]

And can this be on either a personal or business account?

[ett1954]

You stated you would be using your old business account, on that you can invoke the trading allowance only if your total income in the tax year was less than £1000.  I presume you would be making more than a thousand otherwise you would be making a substantial loss.

If you sell on your personal account you are breaking the the Consumer Rights Act - 2015 by trading as a private seller thus misrepresenting your activities and not meeting the legislation required.

[jonatjonatjonat · Accepted solution]

It does answer the second question.

’And secondly is there anything to stop me using my private account for a one off casual trade that will almost certainly leave me below the trading allowance after costs.’

An eBay seller must register as a business if, for example, they sell items they have bought to resell

[gjalp]

To keep within trading laws, you would need to sell these items on a business account and declare income once reaching £1000. Whether or not you need to pay tax or not would depend on any other income you receive. 

[edwardian-dreams]

Is this an eBay law or a govt law 

ie does the govt require you to have an eBay business account before you “flip” some items however obtained for less than £1000

say I won a prize of 12 bottles of wine for something 

I don’t particularly want them (ok not likely now 🤣 but it’s happened to me  in the past when I was just 19 ) so I decide to flog them 

Do I really need to open an eBay business account ?

[ett1954]

"Is this an eBay law or a govt law" - If you purchase something to resell, as the O.P. had intended, you are defined as trading and in order to meet government legislation you must declare yourself as a business and meet certain requirements for selling online under the Customer Rights Act - 2015.  Trading under the guise of a private individual is a criminal offence.

It is eBay policy that a trader must register as a business seller in order to ensure that certain obligations required by a business to sell online are met; namely that a compliant returns policy is in place and the the contact details are provided before the sale or potential sale is made.

With regard to your wine you have won this would be considered your personal possession (not purchased with the intent to resell) and you would be at liberty to do with it as you wish providing you didn't break any alcohol laws in the process.  As with any personal or second hand items you don't need a business account if you were to sell them.

[happyshopper1982]

Every tax paying individual has a tax free trading allowance up to £1k. It isn't a business specific thing hence the confusion over where to list it.

[edwardian-dreams]

Ok thank you

So regardless of what you earn under 1k you have to inform hmrc if you’re “trading”? Let’s face it many people do it for some pin money , not talking about thousands of pounds type  activity

cos that’s not what hmrc say 

they say if you trade you don’t have to inform us if you earn less than 1k

theres no mention by them that you have to be registered as a business here

as for ebays policy that you have to be a business seller so you have returns policy, it’s not law, and a “flipper” can have a returns policy 

its confusing at times 

ps my mum and dad and friends drank the wine and  were surprised when got home from work till I explained 

I got it cos I wrote on some magazine that I was shocked that 10 year olds were allowed to hire a nightmare on elm street video in blockbusters 🤣 

[ett1954]

So regardless of what you earn under 1k you have to inform hmrc if you’re “trading”? Let’s face it many people do it for some pin money , not talking about thousands of pounds type  activity

cos that’s not what hmrc say  - I never mentioned HMRC in my post  because this is not specifically an HMRC issue.  A trader, irrespective of their tax liabilities, has to conform to the Consumer Rights Act - 2015, amongst other pieces of legislation.  You cannot do that registered as a private seller on eBay.  As I mentioned, amongst other things, trading and misrepresenting yourself as a private seller is a criminal offence.

To clarify; if you are trading as a business seller and receive a total income (not profit) less than a thousand pounds across any, and all, online platforms combined then you are not required to inform HMRC.  The matter presented by the O.P. (selling a bulk lot of ink cartridges they have purchased to resell) is nothing to do with tax law but consumer law.

[edwardian-dreams]

Ok many thanks for helping me understand 👍

[jacemodernist3]

Looking at your items and sales I think you should register for self assessment. Before eBay forward your information to HMRC because you've sold a fair bit this year.

You can check to see if your details have been forwarded to HMRC  here.

https://www.ebay.co.uk/mes/transaction-reports?q=tax

Check if you need to tell HMRC about additional income.


https://www.tax.service.gov.uk/guidance/check-non-paye-income/start/how-did-you-receive-additional-i...

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

[happyshopper1982]

My current account is all house clearance fodder as I downsized recently. Granted I sold quite a lot but having not worked for 4yrs in the run up to the downsizing I need the money so everything is for sale and nothing to do with HMRC unlike my OP. If you're referring to the Deagostini 'New/Sealed' stuff it's commonplace to sell these individually as they fetch a significantly higher price than offloading them in job lots as an incomplete project.

[jacemodernist3]

I just looked at your account and amounts sold. Check the links you asked for guidance on; well, that will answer your questions you can see if you've received a digital sales report that they will submit. HMRC have already started sending out brown envelopes to people who they believe owe them money. Go down to your boot fair to sell it off.  Entirely your choice.

[happyshopper1982]

No report added but I'm quite happy to defend my position if they do come knocking. I actually think these letters are a bit of an affront hoping to catch honest people out.

I'm actually already registered for self assessment when I registered as self employed post redundancy, even though I was perfectly in my rights to claim JSA. But as it wasn't practical for me to do so as I was an unregistered carer for my late mother, I thought it morally wrong to do so. So I actually saved the the taxpayer a fair few thousand by not registering for either. And that's why I'm in this position now of having to sell my items to make up the deficit.

[jacemodernist3]

What you will see is eBay will require your NI number and put restrictions on your account until they receive it. But it's the bank accounts your funds are paid into that usually will see if it's being used as a business account.

Be careful of selling the same thing multiple times. Cameras put in your description profile you're selling personal items or clearing a deceased relative house contents.