Got the dreaded letter from HMRC

[jilly1910]

Have received a letter from HMRC about online selling and money earned and they’ve asked me to contact them to disclose my earnings .  The thing is my whole family use my EBay account , daughter sells her unwanted clothes , my son his toys , I sell my own stuff BUT I do also sell items which Ive found cheap and know I can get abit more cash for.

My question is will HMRC differentiate between the two and how do I prove to them what was mine/my children’s in the first place  and what I had found and bought.  I suppose the split is 50/50 

[*vyolla*]

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@second-time-around93 wrote:

The letter I received from HMRC requests all sales info up to April 2023, I've been selling on ebay for over 10 years and don't have that data. I like many others selling things we own, might make profit as a by product but don't do it with that in mind. If inflation is taken into consideration most people would of lost money, not made it.

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They want all sales up to April 2023 or just tax year April 2022 - 2023?

[luxuryflames]

I went to the doctor's about this new ruling as it had me stressed out, his advice was paracetamol Take paracetamol. God damn paracetamol. That's the answer to everything isn't it.. Paracetamol.. doctor I think I'm having a heart attack , aha  you've guessed it.................

[second-time-around93]

In the letter it says "we have information that shows you've earned income from online marketplace sales up to the tax year ending 5th April 2023. You need to tell us about this income as you may owe tax"

[rainbowtrax]

"up to the tax year ending 5th April 2023" implies that they want all previous years up to and including the 2022-23 tax year. 

[messier44000]

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@carbtec wrote:

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HMRC are not fools & they cannot be easily fooled. They know what they are looking for & they are very experienced at finding it. They also lack any kind of 'emotion', they care not for any kind of sob story anyone's imagination can conjure up, if anyone they investigate has evaded paying tax then they will go all the way & still sleep well at night.

Reminds me of around covid time, when through human error / oversight I owed them money.

On the phone to them, the lady as above showed no emotion and wanted me to pay in full NOW !

Other than being tempted to ask her if she ate children for breakfast, said I would settle by BACS 

straight after the phone call.

Then told me she would inform HMRC accounts they would see my ££s in the next 15 minutes.

So as Carbtec sayd, don`t have a sob story prepared in advance. Their computer will say no.

[second-time-around93]

I personally can only see back 5 years on my account, I assume ebay can see the same. I have been on ebay for nearly 20 years sold and purchased so many things to count. Funny how massive corporations pay next to no tax and there onto me flogging my old junk 😂

[w.l.stubbs]

You can request a copy of the data ebay hold on you in,

My Ebay, Account, Personal information and privacy, Request your E-bay data,

You can generate a report on all data E-bay hold on your sales going back a lot further than 5 years I think.

 

[rainbowtrax]

Yes, you won't get details of any further back from ebay, that's the same for everyone. If you've been buying and selling as opposed to just selling your own unwanted items then HMRC would expect you to have been keeping your own records - not that I'm saying you have been trading, only you know that. But HMRC have obviously seen something that's triggered the letter so your best bet is probably to get in touch with them, be honest and take it from there. If you've not kept records then that's also something that has to be sorted out with them.

Have you been dabbling - what they've now started Americanising by calling it a "side hustle"? If you have then you're allowed a turnover (not profit) of £1,000 a year - called a trading allowance - before you're required to fill in a self-assessment.

If you have been trading above this figure, then you should have been completing self-assessments but whether or not there would be tax due and how much depends on your own circumstances - like whether you've used up all of your personal allowance on income from other jobs, whether you're a higher rate tax payer etc.

Even if you haven't been dabbling/trading then it's probably best to contact HMRC as they're the ones who have to be convinced.

[4_bathrooms]

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@rainbowtrax wrote:

"up to the tax year ending 5th April 2023" implies that they want all previous years up to and including the 2022-23 tax year. 

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Here is a template of the nudge letter that HMRC sends out (PDF file). It contains the following sentences:

"We have information that shows you’ve earned income from online marketplace sales up to
the tax year ending 5 April 2023." 

This is clarified later:

"If you have income to declare from any tax year up to 5 April 2023"

[rainbowtrax]

Thanks @4_bathrooms , that's really useful. I hadn't seen that before. It does make pretty clear what needs to be done and that it includes previous years - as you would expect it to.

@second-time-around93 can you confirm that that's what you've received? Assuming it is, then you really need to just contact HMRC asap to sort it all out.

[second-time-around93]

I could not see any "request your ebay data" button.

If you need to see any sales data etc you go to "payments" and then "reports" but as I said I can only see back to January 2020 and it won't allow me to go any further.

HMRC are useless on the phone, didn't really say much that I didn't already know, don't think they had any specifics on hand so just gave out generic responses.

I honestly think this is complete madness, justifying selling items from years ago, can't remember what I ate for dinner last week 🤣

[luxuryflames]

It's an eBay mafia nightmare 

[ett1954]

The only way eBay can be held responsible for this is their reluctance to educate effectively a seller's legal responsibilities if buying to sell on their site.  You could argue that eBay are therefore complicit in encouraging illegal trading; although that is not stating that the poster in question is in that category - only they know that.

I suspect we will be seeing many more threads of this nature in the coming 12 months.

[moldosgifts]

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@luxuryflames wrote:

I went to the doctor's about this new ruling as it had me stressed out, his advice was paracetamol Take paracetamol. God damn paracetamol. That's the answer to everything isn't it.. Paracetamol.. doctor I think I'm having a heart attack , aha  you've guessed it.................

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Although for heart issues the answer would be asprin, please note this is not medical advise!

[rainbowtrax]

So how you play this with HMRC really depends on what you've been doing.

Have you been buying to sell? If not, then there's no tax liability and you have to convince HMRC that these were all personal posessions.

If you have been buying to sell, has your annual turnover (everything coming in before taking off the cost of postage and cost of the items etc) been greater than £1,000? If it hasn't then you don't need to have been filing self-assessments - but you still need to convince HMRC.

If you have been buying to sell and your annual turnover was over £1,000 then you should have been filing annual self-assessments, even if it turned out that no tax was due, so that's when you have a bigger problem and could run into fines for late filing etc.

[classic_remains2002]

HMRC will already know to the penny what your account has generated in income. A lot of people should have registered as a business but didn't for various reasons, not needing to accept returns, the private free listing days etc. The person named on the ebay account will be liable. I'd urge everyone reading this to either make sure they stay under the threshold or register as a business. If someone is really just selling the odd bit and bob they won't go over the threshold so won't be a problem. There are and always has been a lot of people raking in thousands a month and not paying tax which is not fair to the business sellers and others paying more tax because of that. The HMRC can and probably will go back to 2017 and you'll be liable on the lot for tax at 20% or 40% based on your tax liability. There will will probably be a fine of up to 100% of the amount avoided if it's deemed to be a deliberate act as well. Also as far as my understanding and they usually expect payment in one go although I think I sometime a payment plan can be arranged. The HMRC are ruthless unfortunately as I said, I had a friend get investigated because they discovered something on a house rental portfolio and again they went right back, came up with a figure and doubled it with the 100% fine. He had to take a loan out to pay HMRC otherwise it was their intention to seize his portfolio assets, nightmare. Moral of the story, pay your tax. If you are selling on here and have more than several items listed (a lot of listings will show intent to sell at a level higher than the threshold) then register as a business and a lot of your income can be mitigated with business costs, postage receipts, fuel etc. 

Hopefully its not too painful for you and your family.

[jofo_441]

This worries me so much. I've asked before and you guys have said I would be fine, I even did the HMRC test online and was all good as its all my own stuff that I've either brought new or second hand on ebay or online and always sell it lower than what I paid. I'm so scared to get a letter as I've heard horror stories. I sell my stuff to pay off my credit card or buy new stuff.  Maybe it's time to give up.

[4_bathrooms]

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@classic_remains2002 wrote:

I'd urge everyone reading this to either make sure they stay under the threshold or register as a business. If someone is really just selling the odd bit and bob they won't go over the threshold so won't be a problem.

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What threshold?

[lucy_farmer]

@classic_remains2002 wrote:

I'd urge everyone reading this to either make sure they stay under the threshold or register as a business. If someone is really just selling the odd bit and bob they won't go over the threshold so won't be a problem.

What threshold?

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Indeed .

If you're selling your own stuff, theres *no* threshhold. (unless you sell one object for over £6000. and that's just too scary to do on ebay!)

If you're trading as a business-regardless of the amount of money concerned- you should be registered as a business.

Up to £1000. it's a trading allowance. 

It's not a 'flogging your own stuff' allowance....

[w.l.stubbs]

On My Ebay click your account tab, under the first heading "Personal information and privacy" the fifth option down is "Request your ebay data"

You can generate a report from the option provided and break it down to sales, purchases or search history, it takes Ebay up to 7 days to create the report and send it to you via a link,

I have been a member since 2000 and have requested some of my data from them from the day I joined to the present day, I have not yet received it but I will be interested to see what information they have on me over my 25 years of membership.