Ebay and the taxman

[davids1954corvette]

Hi, Like a lot of people I'm wondering about selling and whether I have to pay tax? It's a mix of my late mum and dad's stuff and stuff you buy from charity shops and car boots, a lot I've bought for myself over the years and have now sold. Obviously the bar for paying tax is fixed so low that most people would come under the banner for paying tax even if they were selling on a casual basis. So basically is everybody waiting for a letter from the taxman?

If anybody wanted to start paying tax on their profits as a new payer by filling in a self certification form online or whatever its called? Does your tax paying start there or have you poked the bear and they go back as far as they like which seems a bit unfair?

If there was an amnesty sort of thing they would get a better amount of people coming forward?

Your thoughts and advice please

[*vyolla* · Accepted solution]

Your late Mum and Dad's stuff wouldn't be taxable and can be sold on a private account, as would any items you've bought but no longer want.

If you buy from charity shops and car boots to resell then these items would be taxable as you'd be considered to be trading and should list these on a business account (easier for accounting to keep them separate). Once you sell £1,000 of items on that account you've exceeded the Trading Allowance for small business sellers and would need to declare your profits on a tax return.

[davids1954corvette]

But do they go all backdated on me?

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[*vyolla*]

If HMRC decide that you should have been paying tax, then yes, they can go back.  Looking at your account, I can't see them doing that though. 

[davids1954corvette]

Or wait for to see if there's a letter like everybody else?

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[papso22]

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@davids1954corvette wrote:
Or wait for to see if there's a letter like everybody else?

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If you know you have a tax liability it's not a good idea to let HMRC get to you first.

[davids1954corvette]

So I would send returns from what start date?

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[vintique*violet]

@davids1954corvette 

As per eBay - May be helpful for you. 

There's no new 'side hustle tax'!

We want to give you peace of mind that there’s no new ‘side hustle tax’ or a change to existing tax rules for selling online.

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

So, you still won’t pay tax unless:

You are ‘trading’ or buying and selling multiple items to try and make a profit or run a business

You sell an asset for more than £6,000 (the level where capital gains tax may apply)

Check out these examples:

Grace, Manchester

Grace sells old clothes to make space in her wardrobe. Even if she sells a lot of her old or unwanted clothes she isn’t trading and sells her old clothes for less than she paid for them, so there is no tax.

Annual eBay sales: £420

Annual eBay profit: £0

Taxes owed: £0

Claire, Bristol

Claire sold her old furniture when she was moving house. Some of the furniture was valuable, but always less than £6,000 per item, so there is no tax.

Annual eBay sales: £4,000

Annual eBay profit: £0

Taxes owed: £0

Ben, London

Ben sells his collection of trading cards for a profit. Even though he receives £18,000 and makes a profit of £2,900, he has a capital gains tax-free allowance, so there is no tax.

Annual eBay sales: £18,000

Annual eBay profit: £2,900

Taxes owed: £0

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.

See more guidance from HMRC

When you may need to pay tax for selling goods online (according to HMRC)

Generally, only business sellers trading for profit might need to pay tax.

If you’re selling unwanted personal possessions, such as used clothes, an old mobile phone or unwanted furniture, it’s very unlikely you will have to pay income tax.

If you sell possessions for more than you paid for them you may have to pay capital gains tax, but only if your item sells for more than £6,000 and you exceed your annual allowance for such gains (currently £3,000).

For more information on when you may need to pay tax for selling goods online, see guidance and examples from HMRC.

You can also use HMRC’s ‘checker’ anonymously to check whether you may need to report any income.

Learn more

Keep selling with confidence

Tax can be complicated. If you have any questions about whether you’re running a business or whether you have capital gains to pay on asset sales over £6,000, you should consult a tax advisor or look to guidance and examples from HMRC.

Learn more

[davids1954corvette]

This is the sort of information I've been crying out for
Thankyou

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[vintique*violet]

Most welcome, I hope it puts your mind at rest 😉 

[forestfeline62]

It could be that ebay haven't got around to everyone yet to let them know if they owe tax .They said they would be asking people for their national insurance number to pass onto HMRC if they felt you owed tax ,so if you haven't had this request yet then you probably don't owe tax . They will send you a message to let you know one way or the other  so keep checking your messages from ebay .

[davids1954corvette]

Thankyou

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[edwardian-dreams]

The taxman’s isn’t after people making a bit of pin money now and then

its the constant traders that don’t register as a business on eBay but make thousands 

how they can prove the difference  is another thing  because many private sellers have hoarders of stuff they offload on eBay ..maybe not making thousands but over the new 1700 whatever it is limit 

[sml192]

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@forestfeline62 wrote:

It could be that ebay haven't got around to everyone yet to let them know if they owe tax .They said they would be asking people for their national insurance number to pass onto HMRC if they felt you owed tax ,so if you haven't had this request yet then you probably don't owe tax . They will send you a message to let you know one way or the other  so keep checking your messages from ebay .

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Ebay are required to report your sales to HMRC if you sell more than 30 items or €2,000 worth (approximately £1,700) in a year (Jan to Dec).  If eBay are required to report your sales then they will need to ask for your NI number. 

It does not necessarily mean, however, that you will need to pay any tax and certainly doesn't mean that eBay suspect that you owe tax, that is not their responsibility. 

[the-dustbucket-tradingco]

Hi, hope this helps.

1) If you sell your own items be it new and not worn/used or junk & your mums stuff, its yours. Its better than landfill and is eco friendly💚♻️

2) It only becomes a business if you buy to sell to make a profit,  if you go to car boot/charity shop and buy to sell, its classed as an income since you are likely to have some profit. 🤞

Keeping 2  eBay accounts would be complicated as you are likely only going to sell the odd item for profit, however, its easy to keep the tax man happy by keeping books and have a self-employed number.  If your hobby items make £1,000 in sales, even before expenses it is still £1,000.  The tax man wants you to declare that amount.  & you show your expenses and profit as a lump sum yearly and can decide on simplified expenses if you use your home for a hobby/eBay.

The legal difference is the 2 different accounts on eBay, private and business sellers with the latter offering returns, which you can add onto a listing and say you offer returns for that item but the buyer has to pay.

Keeping accounts is made easier since eBay show your items when sold and you can keep record of postage cost, cost of any printing ink and travel to Post Office.   Get a friend to help you do the form but send it back before Jan 31st!!  Its a pain but you can phone them for help. 

I am sure they have more barber shops to chase than your old boots 😂

[the-dustbucket-tradingco]

Unlikely, unless you are now living in a mansion wearing a rolex 🙂  keep records for 3 years once you start to declare. 

When eBay started there were no business accounts.

Plus no tacky *bleep*e items from China filling up a search for a jumper. 

Thats the only thing, a business on here is 24 hours a day with big profits, where you are classed as a hobby so its not the same league. The Tax Office and eBay are seperate but I imagine Private Traders with big profits on here will get a look into from time to time from HMRC.

[davids1954corvette]

Thankyou

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