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 

[plhubbs]

I was gonna say, HMRC must be getting a tonne of eBay referrals since these changes because I'm sure LOADS of people are reaching the 30 item limit.

[jckl1957]

Even after you give Ebay your NI number, your details will not be reported straightaway - I assume (but don't know) the information will be put together and sent at the end of this year.

When Ebay do send your information, you will be able to check it here:

 

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

I sent them my NI number several weeks ago and plan to just carry on selling.

30 items and £1740 are thresholds, rather than limits.

There is not a limit on the number of sales a private seller can make or the amount they can get paid for those items.  As long as you are selling your own personal items and not buying or making items with the intention of selling them, you are not, generally, taxed on the money you make.

[vinylscot]

Although eBay will be providing HMRC with your selling statistics, there will be no human involvement at this stage. As long as you have provided your NINO, everything will just be added automatically to your file.

If any trigger points are reached, where HMRC (automatically) decides an assessment may be necessary, a totally standard communication will be issued.

Only in cases where the figures suggest some obvious issues will there be any human involvement at this point (and this will be flagged up by their automated processes). Later, depending on responses to the standard communications, and whether the seller has engaged with HMRC on the matter, cases will involve some level of human intervention.

Everything will be as automated as possible, and cases will only be dealt with individually if either  party feels there is any need to do so. 

One of the best ways to ensure you DO get individual attention is to refuse to provide eBay or any other platform with your NINO. Your figures will still be reported, but with a note added, referring to your non-cooperation. Such cases will require human involvement to tie them to the NI number, and you can be pretty sure HMRC will take a closer look at these, than they will over the millions who willingly cooperate.

[thriftyfe_mail]

HMRC will clearly be after the big fish ....not the little tiddlers. 

Now that eBay have thrown those under the bus that previously escaped under the premise that they chose to operate as private sellers , but obvious to all by the number of sales and type of goods sold that they should have registered as business sellers, will find it hard to avoid the scrutiny of the tax inspector.

Ebay have their ‘get out of jail card’ that individuals operating on their site are responsible for their own finances including self assessment tax. Those that refuse to provide their NI number and suddenly cease operations will be a red flag to the tax inspector who will have had historic data information passed on by eBay already. They do hold all those personal details  and only have to join the.dots by cross referencing names, address, bank accounts details etc.  In this technological age it isn’t rocket science. 

Pleas of ignorance of the tax laws that are in existence or those that wish to plead their case regarding their levels of business trading and yet to pay tax on - good luck.  

The tax inspector knows every trick in the book .......and heard many excuses and  porky pies along the way so it will certainly fall on deaf ears. Any excess income generated from eBay trading will be added to a main job income or to those on working Universal Credit that includes all the side ‘hustlers’  with an estimated computer generated tax bill coming through the letter box. There Is no point closing the door once the horse has bolted and will probably result in a fine to boot. 

In any conversation that may arise with HMRC is to  come clean and be honest and remains the best route to take. However there will be a financial cost. 

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

[carrotdrusus2]

The phrase is 'damp squib' as in a firework that doesnt go off, not damp squid. Squids are always pretty damp wouldnt you say?

[3942rick2005]

I am always correcting people over that and bated breath when they say baited breath!🤣 Baited breath and damp squid do go together if you are a fisherman.

Anyway, back on track.......

[carrotdrusus2]

Bit of a red herring!!

[suelel1968]

I expect the tax man will get everyone in "one foul swoop"

[vinylscot]

It's possibly a mistake to assume that HMRC will go after the "big fish".

Sadly, that would take a great deal of manpower, which will more than likely not be available. It will also take more time, and they will be wanting quick results.

Many of the "little fish" can be caught in HMRC's automated processes, with little or no human involvement. A couple of standard letters will be enough to scare many into complying, rather than possibly being subject to stronger sanctions later. Remember, most of these individuals know they're "at it", and know that this is coming.

Sadly, a lot of individuals, who really shouldn't be liable for tax, will be swept up with this initial contact. They will see the letters HMRC on the letters, and they will panic and pay.

From HMRC's point of view, sweeping up a huge amount of little fishes is much easier; it shows that they "mean business"; and, when added together, it may raise a significant sum for next to no effort from them, just a couple of computer-generated standard letters.

[vinylscot]

If we're being a little picky, as you are, how do you know when someone says "baited" instead of "bated". To me they sound rather similar. 😀

[dch2112011]

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@carrotdrusus2 wrote:

The phrase is 'damp squib' as in a firework that doesnt go off, not damp squid. Squids are always pretty damp wouldnt you say?

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It all depends how long they have been out of the water  - by the way doesn't and wouldn't have an apostrophy  and you missed a comma after damp  if you are turning this discussion into an English lesson ! 

[jckl1957]

It's spelt apostrophe by the way.

If you're turning this discussion into an English lesson.

[3942rick2005]

This was meant in the context of the written word not diction.

[vinylscot]

The first line of my comment no 169 should read "It's possibly a mistake to assume that HMRC will go after the "big fish" first."

I see that I had left out the last word. HMRC will obviously, at some time, go after the big fish, but I think it may be a mistake to assume that they'll do that first, for the reasons stated in my comment.

[carrotdrusus2]

Not an English lesson, basic education I would say.

[thriftyfe_mail]

In part I concur with most of your thoughts you have posted on this subject....however in the context of my posting the 'little tiddlers'  are the many genuine sellers and the 'big fish' are those masquerading as private sellers.  So IMHO the tax inspector will pursue the latter by those means they have at their disposal.  

HMRC will do what they do best and catch those traders that have been avoiding tax to help fill the coffers for  Labours spending spree.  

If you get the letter from the taxman and disagree with their computer generated tax bill be aware you have the opportunity to engage and challenge their findings. Or if you agree having been caught out on tax evasion just pay up. 

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

[dch2112011]

Yes, punctuation is a basic !

Yet for one who cannot grasp the basics, you are quick to correct a very simple one letter typing error, and gloat that you think you have corrected a major misunderstanding of the origin of damp squib by referring to it's origin being from a 'firework' that failed to ignite  when damp.

The misconception that the idiom  damp squib originated  from a damp 'firework' not igniting  is not true.

A squib was used to ignite the main propellant in a cannon, when they became damp they did not work - the idiom was formed well before a firework  was named a squib !

I think you may find the fire work was named after the industrially used squib in coal mining.