Ebay and taxes for a private seller.

[addyeddy]

I read in the papers that there are changes afoot and anything over 1,000 a year in sales will have to be declared, yet I've gone onto the HMRC site, put in all relevant details, and it says I don't have to declare unless I've sold things worth over £6,000.

I'm only selling personal items that I no longer have a use for.

Can anyone clarify for me? Thanks. 

[incredible_how]

money saving expert says it's £1000 before you have to declare and frustratingly that is before fees (so I expect before postage also); I had looked this up previously, not just for eBay sales. But it seems that eBay will now send info to HMRC for sales over 2000 euros or more than 30 items (not very helpful for those selling off lots of small things...)

https://www.moneysavingexpert.com/news/2024/01/online-platforms-etsy-vinted-airbnb-report-hmrc/

"If all you're doing is selling goods online, firms will ONLY pass on data to HMRC automatically if you're selling 30 or more items a year OR have total earnings over the equivalent of €2,000 (currently around £1,700) (a) – so if you're doing a lot less than that, it isn't an issue. However, it's worth noting you may still have to pay tax if you earn £1,000 or more selling"

When I sold things I made via Etsy that was all declared to HMRC, but on eBay I don't buy or make to sell, except sometimes for charity, so am wondering if charity sales are also included. Also I sell for my parents (again not buying to sell, just selling "the family silver"), with the 30 items a year threshold I might make them have a seperate eBay account!

[*vyolla*]

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@incredible_how wrote:

money saving expert says it's £1000 before you have to declare and frustratingly that is before fees (so I expect before postage also); I had looked this up previously, not just for eBay sales. But it seems that eBay will now send info to HMRC for sales over 2000 euros or more than 30 items (not very helpful for those selling off lots of small things...)

https://www.moneysavingexpert.com/news/2024/01/online-platforms-etsy-vinted-airbnb-report-hmrc/

"If all you're doing is selling goods online, firms will ONLY pass on data to HMRC automatically if you're selling 30 or more items a year OR have total earnings over the equivalent of €2,000 (currently around £1,700) (a) – so if you're doing a lot less than that, it isn't an issue. However, it's worth noting you may still have to pay tax if you earn £1,000 or more selling"

When I sold things I made via Etsy that was all declared to HMRC, but on eBay I don't buy or make to sell, except sometimes for charity, so am wondering if charity sales are also included. Also I sell for my parents (again not buying to sell, just selling "the family silver"), with the 30 items a year threshold I might make them have a seperate eBay account!

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It's £1000 if you are a business seller, this is a Trading Allowance. It's nothing to do with private sellers, private sellers have their own personal tax allowance.

I think that it would be a good idea for your parents to have their own eBay account, obviously you can help them operate it. 

[44sooze]

I've been selling hundreds of the items from my mother's estate that didn't go to charity since 2021. I declared many of the sales through the probate process and have made around £6k a year before eBay fees and expenses. This has supplemented my pension and I don't consider myself a trader - I've just been getting rid of things I didn't want or need hoping to get a decent price for it. I've been really worried by the publicity though, so I decided to phone HMRC. They said I WOULD have to pay tax on anything over £1k and promptly registered me as a business for self-assessment. I'm now waiting for a code as I need to complete returns for the last two years. I also checked this with a financial advisor. Frankly I feel that all the effort I've put into selling these items, many of which were small value, has not been worth it. 

[papso22]

That doesn't sound right at all. Were these items left to you in your mother's will?

[*vyolla*]

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@44sooze wrote:

I've been selling hundreds of the items from my mother's estate that didn't go to charity since 2021. I declared many of the sales through the probate process and have made around £6k a year before eBay fees and expenses. This has supplemented my pension and I don't consider myself a trader - I've just been getting rid of things I didn't want or need hoping to get a decent price for it. I've been really worried by the publicity though, so I decided to phone HMRC. They said I WOULD have to pay tax on anything over £1k and promptly registered me as a business for self-assessment. I'm now waiting for a code as I need to complete returns for the last two years. I also checked this with a financial advisor. Frankly I feel that all the effort I've put into selling these items, many of which were small value, has not been worth it. 

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I've no idea why you would be considered to be a business seller, I'm really surprised at HMRC and your financial advisor. You must've made it appear as though you weren't selling off your own personal items. I would have assumed that any items left to you by your mother would be yours to dispose of as a private seller, not a business, I don't claim to understand anything about probate though so maybe there are different rules there.

[papso22]

I can find nothing that says income tax is due if you sell items left to you. 

[44sooze]

My financial advisor's expertise is pensions and he said an accountant might be able to offer better advice. I may end up doing that I think.

Yes, I was surprised when HMRC said I'd be considered a trader. As the advisor was completing my self employment registration form he asked me the date my business started and what my business's name is, things like that, which stunned me a bit. I did make it clear I'm only selling personal items and not purposely trying to make a profit. I just don't want to give my mum's stuff away for nothing as some of it would have been quite expensive when it was bought. 

[44sooze]

Sort of. They were just part of her estate which came to me and my sister (I've been giving half of the sales profits to her). I still have lots of jewellery left to sell but luckily most of it's costume as this has put me off doing anything now. I've also been selling items of mine I no longer wear too amongst it.

[papso22]

The only business activity in thst scenario would be if you charged her a fee for selling her part of the estate.  

I think something got lost in translation when you spoke to HMRC,  you probably focussed on selling on eBay rather than simply selling inherited items, and a pensions advisor has no business giving tax if they have no tax experience. 

I suggest you check with HMRC again.

[1984jo]

I think it is very confusing, I checked and in the UK you have to earn over £12,000 a year to pay tax but over £1,000 u just have to declare it but when u try it not really interested so not sure if that because they are not going to look into it until 2025. But I sell a lot of items that are mine, my family and in some cases my friends who not great with computers stuff but I definitely am not making £12,000 a year. But I think it should be a set amount like £1,700 but it should not 30 items has a lot of people sell stuff (kids clothes) that is not worth loads but have a lot of them throughout the year. My personal opinion is it seem made this is designed to catch people who are benefits and making a lot of money on eBay etc

[*vyolla*]

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@papso22 wrote:

The only business activity in thst scenario would be if you charged her a fee for selling her part of the estate.  

I think something got lost in translation when you spoke to HMRC,  you probably focussed on selling on eBay rather than simply selling inherited items, and a pensions advisor has no business giving tax if they have no tax experience. 

I suggest you check with HMRC again.

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100% agree with this.

I think that if this was mentioned "They were just part of her estate which came to me and my sister (I've been giving half of the sales profits to her). " then HMRC may consider her to be a trading assistant or similar?

[ezzie58]

Hi HMRC will tax you from 1st Jan 2024 once you have gone over your £1000 allowance even if thay take until 2025 and you will have to pay the tax back to them. Be very careful with advice given unless you want to end up with a big tax bill in 2025. Speak to HMRC I did so will sell up to £1000 and that's it with any platform selling.  Its a shame but the Government has to get the money back for lockdown starting with us. Dale

[*vyolla*]

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@ezzie58 wrote:

Hi HMRC will tax you from 1st Jan 2024 once you have gone over your £1000 allowance even if thay take until 2025 and you will have to pay the tax back to them. Be very careful with advice given unless you want to end up with a big tax bill in 2025. Speak to HMRC I did so will sell up to £1000 and that's it with any platform selling.  Its a shame but the Government has to get the money back for lockdown starting with us. Dale

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This is incorrect.

The £1000 is a Trading Allowance, and it's for small/hobby business sellers. 

A private seller selling their own personal items isn't subject to this, it's nothing to do with their tax allowance.

See for yourself here:

https://www.gov.uk/check-additional-income-tax

If all you're doing is selling goods online, eBay and the other online platforms (such as Vinted, Depop, Etsy) will ONLY pass on data to HMRC automatically if you're selling 30 or more items a year OR have total earnings over the equivalent of £1,770.  eBay will automatically share this information with HMRC by 31 January 2025 – the first lot of data-sharing will cover the current 2023/24 tax year.

Even though the above data is being shared, it doesn't mean that you will owe tax if you're a private seller.

[44sooze]

Thanks for the GOV.UK link as this seems to say I won't need to pay tax if I've only sold personal items. This is not what HMRC told me last week. 
I think all the recent publicity has worried and confused a lot of people - the replies in this thread bear out how muddled people are getting.

I've now decided to speak to a tax advisor, especially as HMRC have registered me as a trader because of the amount I've been selling. Hopefully she can reassure me!

[44sooze]

Thanks. It sounds like HMRC need to be careful what they tell people (unless you are trading of course).

[44sooze]

My pensions advisor was only doing me a favour and said others  would have a more in depth understanding. This is why I'm speaking to a tax specialist next week.

I spent about 40 minutes waiting to speak to someone at HMRC and the first advisor put me through to the self assessment team. So, maybe by then I wasn't as clear as I should've been and assumptions were made. 

[44sooze]

It sounds like you've drawn the short straw with all the selling you do! Sales can soon add up to over 30 items so personally I really want to make sure that what I'm doing is legit rather than wait for HMRC to come after me. A decent night's sleep again wouldn't come amiss too...

[*vyolla*]

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@44sooze wrote:

Thanks for the GOV.UK link as this seems to say I won't need to pay tax if I've only sold personal items. This is not what HMRC told me last week. 
I think all the recent publicity has worried and confused a lot of people - the replies in this thread bear out how muddled people are getting.

I've now decided to speak to a tax advisor, especially as HMRC have registered me as a trader because of the amount I've been selling. Hopefully she can reassure me!

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Hopefully, though I despair at the amount of misinformation that's being given out at the moment - two BBC radio shows this week had guests in who got it wrong, as well as the Guardian and the Daily Mail. Even HMRC re-released a press statement clarifying what their daft choice of words was with 'side hustle'.

Same as you've just done with that link to the HMRC website, it's easy to check if they'd classify you as a business seller or a private seller.

Only businesses are required to register for tax and prepare accounts, that includes sole traders, people who buy to resell and those who make handmade items to sell. 

[44sooze]

Just to update you, I spoke to the tax accountant who asked me all sorts of things and then confirmed that I shouldn't have to pay tax for selling low value personal items. She said she's had lots of queries about this recently thanks to all the news items about it.

Anyway, she advised me to contact HMRC again and ask them to cancel the UTR code, which I did. But when they looked up my case they told me that all was in order and I had no need to complete a self assessment as I don't meet the criteria! I was also told to ring them again if I do receive a code and they'll cancel it.

The accountant mentioned that I may get a letter from HMRC once they get the info from eBay asking me if there's anything I need to tell them. Hopefully they'll have it on record now that I'm not a trader.

Anyway, thanks again for the link. I'd done another similar one on GOV.UK but somehow missed that one.

[papso22]

That's very good news.