EBay asking for national insurance number , I sell a lot but buy a lot hobby is collecting coins

[23mrf]

I’ve started collecting coins and I buy a large lot of coins take out what I want and then Sell what’s left over. Been doing this for 9 months, I am about £500 out of pocket from my initial outlay but am selling about £1000 in sales each month, will HMRC take into account that I am not taking out any money from my ebay account and realise it’s just a hobby or am I going to have to pay income tax on £12000 in sales? If so I may have to sell my collection to pay them!!!!

[moldosgifts]

A couple of things leap out to me.

Your trading as a business yet your registered on a private account,

It not a case of do i a have to pay tax 

Its case do i want to trade legally.

Supply your NIN or they will with hold your pay-outs.

It is a LEGAL requirement for EBAY to supply all these datils to HMRC.

[papso22]

If when you buy the large lots it is always your intention to take out what you want and sell the rest then I would say that is trading.  If you are trading then you need to make sure you meet your tax obligations, which may mean no tax is payable but you still have to register and file returns.

This sort of activity, i.e almost anything to do with collections, is complicated and it might be worth getting professional advice from an accountant.  If you have only been going 9 months then you have time to register and get it all straight.

[cassidy_r_private]

Buying to sell makes you a business.

Buying to sell at a loss by keeping the leftovers might make you a bad businessman, but doesn't stop you from being a business.

You may save fees having a business account and you'll certainly find it easier to set your price points.

When I started, like many people, one thing led to another and I ended up doing some relatively significant turnover and had to confess my sins before HMRC got me and helped me with the confession.

With the help of an accountant who knew what I could and couldn't claim allowances for, after three years of trading and a healthy surplus, my tax liability was precicely zero. This will be the case with many small sellers who are under the RADAR. The bonus was that moving forward I could sleep at night.

If you are shifting £1000 a month in what is a highly competitive environment, you clearly know your stuff. Embrace it, start accounting for your purchases/sales/profits and make some money doing something you obviously enjoy.

If you've made no profit, there will be no liability.

[arkwebus]

Adding to what is said previously do please remember that you pay only on your "profit".  

So [simply] if you sold £12000 but the cost was £11000 you would be liable for tax on just £1000 which would presumably be added to you self-assessment tax return.  

You would need to draw up a simple set of accounts to convince HMRC whether or not there is tax to pay. 

@23mrf 

[game_raid]

There is other factors to consider, if they are currently employed they may have used up their yearly allowance, the OP hasn't said if they are currently working as well as selling on eBay.

As others have said, you need to get some professional advice if this is all new to you.

[cassidy_r_private]

Please bear in mind that it is not illegal (or immoral) to make money. It's something that should be celebrated.

[jofo_441]

Hi.

I'm also really worried about this. Me and the wife have been collecting stuff for years but now having a child we need to shift alot of it. We also use the sales to buy new stuff, days out as all our job money goes on bills. Don't want to be stung on selling my own stuff ya know that I brought at full price.

[jckl1957]

Has Ebay requested your NI Number?

If you sold more than 30 items last year, Ebay will report your sales  (January to December) to HMRC.

However, if you are selling your own, unwanted items, you do not have to pay tax when you sell them.  HMRC are going to be overwhelmed with information from the online selling platforms.  I doubt that they will contact everybody whose details they receive.

If you look at the 'badges of trade' HMRC use, the first one asks if you bought with an 'intention to make profit'.  If you don't buy in order to sell on, even if HMRC contact you, it is unlikely they will feel you need to pay any tax.

[jofo_441]

Hi.

Yeah they asked for my NI number yesterday. Yeah everything i sell is my own as I kinda a hoarder 😂 pretty much everything is sold at a loss from what I paid for it

[moldosgifts]

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@jofo_441 wrote:

Hi.

Yeah they asked for my NI number yesterday. Yeah everything i sell is my own as I kinda a hoarder 😂 pretty much everything is sold at a loss from what I paid for it

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Loss doesn't come into it unless filling in a tax return.

I've had a look largely i think you'll be fine,

The one and only criticism is the new stuff , Just think "i bought it from a shop so i now own it, so when i sell it again it is not new because i owned it". ebay allow it but they are not really brand new are they.

Just keep as many receipts as you can just in case the worst happens. 

But at the moment it is just a reporting threshold as said above @jckl1957 very unlikely anything will come of it.

[rjwilmsi]

eBay has a duty to provide data to HMRC. If eBay requires your NINO then you can either provide it, or eBay will (later) block you from selling at all. eBay providing data and you needing to submit a tax return to HMRC are separate things.

Likewise, needing to submit a tax return to HMRC and you having any tax (or NI as a sole trader) to pay are separate things.

Whether you take the money out of your eBay account isn't relevant to HMRC. You have received the money. If under HMRC rules you qualify as a trader then you have earned the money. The only differentiation that could be relevant is that HMRC allow traders to either operate on a sales completed basis (you declare turnover and costs for sales completed in the year) or a cash in hand basis (you declare how much cash in hand you had at end of year minus start, plus any money you spent. This effectively means items purchased but not sold are offset from profits, but it all evens out in final year of trading)

If in doubt, you should either get professional advice from an accountant, or keep the required records and declare it all to HMRC so you know you are in the clear.

The HMRC website does contain guidance and examples about when collectors/hobbyists become traders per HMRC's rules. If HMRC would be likely to consider you a trader then you should either prepare to do tax returns, or prepare evidence to demonstrate to HMRC that you aren't a trader (per their definition) if they come asking.

[lees_sales21]

My concern is I sell my unwanted comics and other odds and ends. I am not a trader, but can easily sell over 30 items in a tax year. I am not keen to hand eBay my National Insurance number due to potential security risks. eBay have SO many software bugs, I do not trust them with information such as this. 

HMRC are also raising the limit to £6,000 so not clear exactly why eBay have to transfer data to HMRC, if it is nowhere near that amount. 

Worse case scenario they could be provided with a code obtained from HMRC, rather than an individual's NIN. 

[jckl1957]

You stated, 'HMRC are also raising the limit to £6,000 '

I am not sure what you mean by that?  Are you thinking of Capital Gains Tax?  That only comes into play if you sell a single item or a collection with a value of more than £6000.

Ebay have to report your sales if you sell over 30 items, or items to the value of about £1700.

If you won't give Ebay your National Insurance Number, they may hold payouts and restrict your account.  You do have a choice but, if you want to continue to sell on Ebay, you do have to hand over your NINO.

[kath3735_wxmjn]

The limit of £6000 is to do with Capital gains tax and that is for one item or a complete collection sold as one item which will actually affect very few sales on e bay.   As to why they have to give your NI number that is down to the tax man/goverment not e bay.  It stems from a europe wide agreement between i believe 32 countries, all to do with money laundering etc.  That is what i have  understood it to be about, if not correct then i am sure someone on here will let me know.  It is also involves all on line selling sites and such organisations as Airb&b, uber taxis etc.   As i also understand it if you do not comply then you will have funds held and/or your account suspended.

[lees_sales21]

Apologies it was a typo. They are raising the trading allowance to £3,000 in this parliament. 

Up from the existing £1,000 BEFORE fees. 

My problem is I was selling old comics at £2.99 including postage, before the recent Buyer protection fee, so selling 30 comics would have been less than £100 far, far less than the current £1,000 limit, but I would obviously fall foul of the 30 items, which is absolutely ridiculous. 

HMRC also states on the Gov.uk website that there is NO need to inform us if you are selling your old unwanted goods, unless you are selling a single item of value £6,000.

So, as usual HMRC are saying they want the data, yet telling you that you do not have to complete a self assessment taxation.

I know, because I have been through all of this with them and have friends who work at HMRC. 

I do not feel comfortable handing over my NIN to eBay and see no need for it, when the HMRC website states there is no need to inform us.

It also states you do not have to tell us if you only sell on an online platform (including auction sites etc such as eBay.)

And:

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.

Typical, no clear answers.

One page states one thing, another page on the same Government website states another.

I do not feel my NIN is safe with eBay.

I have had quite a few software bugs in the last 2 years, all flagged up to eBay via photos and videos. Not one has been resolved.

So, trusting them with my NIN. 

Sorry, I don't.

If I cannot sell my items without that, then I will just close my account.

A lot of sellers, seem to be suggesting the same given the Payment Protection fee, which is causing major problems.

[sml192]

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@lees_sales21 wrote:

So, as usual HMRC are saying they want the data, yet telling you that you do not have to complete a self assessment taxation.

I know, because I have been through all of this with them and have friends who work at HMRC. 

I do not feel comfortable handing over my NIN to eBay and see no need for it, when the HMRC website states there is no need to inform us.

It also states you do not have to tell us if you only sell on an online platform (including auction sites etc such as eBay.)

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The reporting requirements for marketplaces (set by the OECD not HMRC) and your requirement as an individual to declare your sales to HMRC and complete a Self Assessment are 2 separate things. 

[cassidy_r_private]

Exactly.

However, ebay can insist that you hand over your NI number in order to use their platform - so we have very little choice in the matter.

[edwardian-dreams]

If eBay have to file reports to hmrc I imagine they’d need your NI number because how else are they going to provide info on who you are to hmrc

so does this mean everyone whose sold more than 30:items will have eBay asking for their NI number?

I imagine that’s  probably MOST people ??

[jckl1957]

You can only take advantage of the trading allowance if you are trading as a business.  You have to have a gross trading income of less than £1000.

The government have said that they plan to raise the limit to £3000 in this parliament - that is by 2029 and may never actually happen.

I think (just my view) that sellers whose sales are reported who refuse to supply their NINO may be of more interest to HMRC (who will be told your full name, home address, bank account details) than those who comply.

If Ebay send details of your sales to HMRC, you can check the facts and figures here:

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