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 

[4_bathrooms]

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@*maetrix* wrote:

Got mine a few weeks ago though it wasn't clear about whether it was what i'd made on ebay or through my actual job

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Is this (PDF file) the letter you have received?

[easi77]

Hi Jilly and Dingo

As Dingo says be totally honest with them. How I handle it is by a) Using SKU field to highlight individual sellers and b) keep "Proxy sales records e.g. spreadsheet" where i specify all items sold by proxy and who the seller is and amount of monies and when i transferred them. Best to do via Bank transfer as more of a proven transaction but if cash is best then so be it. It does not have to be a spreadsheet can be just a notebook. I record item name as in listing title, sold price and deduct any fees and postage or other costs incurred to sell item. You then end up with a nett figure for that item attributed to say Grandad or Daughter #1. I have proxy sale records for individual immediate family and a combined record for any other person that has asked me to sell an item on ebay. Personal sales are recorded as well. I've submitted these records to HMRC for last 3 years or so with a summary sheet showing total sales and  each proxy sales channel and touch wood I've never had a comeback. The records are clear and as an accountant said to me, HMRC are looking for the 6 figure sellers business related purchases or expenditure packing materials, labels printer ink car mileage e,g, trips to drop off items at post etc etc as this can be entered on your tax return and is deducted from your gross earnings before tax is applied. Sounds horrendous to start but once in place its really easy to maintain. Find what works for you. I like to enter my records straight after posting as a reminder for entering mileage to post office as that's what I forget most. When you submit tax would issue each party their personal sales record so if tax office comes back to them they can confirm their personal sales against the list you gave them.  ebay will have all sales records available in seller hub. The main thing is don't panic, everyone I know thats been in this position have found HMRC helpful . Good luck

[lucy_farmer]

There's some useful ideas in there 😊 .....

But (I'm not trying to be rude here) paragraphs are your friends!

More people would read your helpful stuff if it was more 'readable'? It's a bit of an impenetrable block as it stands...

[796valt]

Can they still find you if you refuse to give you’re NI  number to EBAY?

[papso22]

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@796valt wrote:

Can they still find you if you refuse to give you’re NI  number to EBAY?

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Of course they can.  The NI number just makes it easier for them.

[classic_remains2002]

Yes of course

[twin--turbo]

Ordinary folke pay tax, tax avoiders don't. just the world catching up on those that either don't want to or don't think they need to adhere to the law.

[ay5_61]

How did you get on Jilly?

[second-time-around93]

A further update on this from me, I have still not provided my NI to ebay and they have now stopped my payouts (I have nothing for sale nor money owed to me).

[twin--turbo]

Why have you not provided your NI number, what's to hide? 

[lucy_farmer]

'and they have now stopped my payouts (I have nothing for sale nor money owed to me).'

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OK, silly question : if you've got no money owed, how do you know they've stopped your payouts?

[*vyolla*]

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@second-time-around93 wrote:

A further update on this from me, I have still not provided my NI to ebay and they have now stopped my payouts (I have nothing for sale nor money owed to me).

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Do you mean that eBay asked for your national insurance number, you didn't provide it, and now you've received a message from then saying that payouts will be stopped?

If so, that's pretty much the correct sequence of events. 

[second-time-around93]

Nail on the head!

[thriftyfe_mail]

There are a lot of concerns  in these forums with HMRC on the war path who are relentlessly pursuing tax dodgers operating on the online selling platforms. That is those who have registered as a private seller but clearly trading making a profit from buying and selling goods. 

They do know who they are and the ones who should be worried. Anybody can have  their concerns allayed (as others have already said)  discuss it with a professional accountant  who will give you their opinion based on your individual circumstances. 

HMRC are not pursuing those genuine private sellers who sell their collectables, personal possessions, downsizing their collection, items they have inherited or gifts they no longer want.  That is unless you have an item of £6,000  value and Capital Gains Tax (CGT) may then be payable. 

Also it may be of interest that the £1000 threshold for trading income will be raised to £3,000 gross . This is for those who are trading including those with side hustles. 

www.gov.uk Boost for side hustlers- as £300, 000 people to be taken out of tax returns, government announces. 

These changes are to be implemented within this parliament.

Eve Williams CEO of eBay UK, commented:

"This will be welcome news for thousands of UK sellers for whom eBay is a side hustle and a means of supplementing their household income during challenging times. By removing the paperwork associated with selling on line, hopefully we will help these side hustles grow into fully fledged businesses."

On the latter point it may be the desire of eBay and HMRC  for  everybody to register and become a business seller but for many genuine private sellers they are perfectly content to remain as they are!

The only true wisdom is in knowing you know nothing  - Socrates, Greek Philosopher

[sml192]

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@thriftyfe_mail wrote:

Also it may be of interest that the £1000 threshold for trading income will be raised to £3,000 gross . This is for those who are trading including those with side hustles. 

www.gov.uk Boost for side hustlers- as £300, 000 people to be taken out of tax returns, government announces. 

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Note, it is the reporting threshold for Self Assessment that they are proposing to increase to £3,000 not the Trading Allowance itself. 

[ett1954]

"These changes are to be implemented within this parliament." - The stated aim was by 2029.  Anyone who believe what a politician says will or won't happen in four years time is living in cloud cuckoo land.  As @sml192  has correctly pointed out above this is simply a change in the level at which someone is obliged to register for self-assessment.

"....... hopefully we will help these side hustles grow into fully fledged businesses." - Maybe Eve Williams can define what a 'side-hustle' is.  Buying to resell defines an activity under HMRC badges of trade, not a piece of American slang.  Giving an impression of a business activity being related to its size has always been one of eBay's misinterpretations ............. or is that deliberate?

[suelel1968]

Note, it is the reporting threshold for Self Assessment that they are proposing to increase to £3,000 not the Trading Allowance itself.

Genuine question - How would that not amount to the same thing? If you don't have to report it, they will not be expecting people to pay tax on it?

I haven't read up on this, i prefer generally to spend time on the here and now, not the what might be's, but they presumably think they are spending more money collecting  tax on £1001 revenue than they are actually collecting.

[lucy_farmer]

'Maybe Eve Williams can define what a 'side-hustle' is. .....'

'.....or is that deliberate?'

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I find it very difficult to believe that Eve Williams has no idea of the UK definition of online selling 'business'.

She is the head-honcho of the UK section of a global online selling mega corps.

Would ebay have given the job to somebody who doesn't know anything about the core of the business?

Williams statement just sound like more bullsh** spin that says actually nothing 'concrete' that could be pointed out as a lie.....

Therefore deliberate.

[papso22]

You will have to report it but not through the current full fat version of the self assessment form.

The actual tax rules are not changing.

[thriftyfe_mail]

Williams statement just sound like more bullsh** spin that says actually nothing 'concrete' that could be pointed out as a lie....

Agree that it is not very helpful and mimics the sort of response we often get from politicians = non specific and vague.

A side hustle for all intents and purposes that HMRC for taxation purposes are well aware of,  is a job or paid activity that you do in addition to your main job. 

The only true wisdom is in knowing you know nothing  - Socrates, Greek Philosopher