HMRC tax on £1000 sales

[Anonymous]

Does the £1000 p.a. sales figure include postage? I sell low value items & the postage is usually higher than the value of the item.  On £1000 sales i'd be lucky to make £200 profit.  Seems the end of Ebay for sellers like me.

[double_o_heaven]

Strange, I typed basically that and my reply doesn't seem to have appeared anywhere 😄

To add, the "tax year" and the "£1,000 limit" are the self reporting limits for an individual based on trading turnover.  Above this level, you have to make HMRC aware you are trading.

This is completely different from the calendar year and approx £1,700 limit over which platforms are required to provide HMRC with information, even if the sales are of personal items.

[papso22]

At least you can spell 'calendar'!

[double_o_heaven]

Well, I didn't want to make a big thing of it, but... yes!  😛

[vintagetoys2u]

Brought up proper !

Sent from my iPhone

[middlesex123]

You say £1,770, but ive seen £1700 as the figure .. Which Figure is correct please ? Are people just 'Guessing' the Figure, as everyone says a different Number !

[*vyolla*]

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@middlesex123 wrote:

You say £1,770, but ive seen £1700 as the figure .. Which Figure is correct please ? Are people just 'Guessing' the Figure, as everyone says a different Number !

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I said £1740, which is what eBay have on their guidance page here:

https://www.ebay.co.uk/help/account/regulatory/sales-reporting/uk-digital-sales-reporting?id=5454&st...

But, because the actual figure is 2000 Euros, the amount will fluctuate depending on the exchange rate at that given time. 

Right now it's £1660.

[1967majortom]

Remember you only pay tax on profit not turnover. So £1000 turnover might be £500 profit subject to tax. Keep records of income and outgoings. Do not pay tax on £1000 turnover which it sounds like they are after 

[*vyolla*]

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@1967majortom wrote:

Remember you only pay tax on profit not turnover. So £1000 turnover might be £500 profit subject to tax. Keep records of income and outgoings. Do not pay tax on £1000 turnover which it sounds like they are after 

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The £1,000 turnover figure is the Trading Allowance for small business sellers - it's the yardstick by which anyone who is a business seller must complete a self assessment tax return. They need to declare income to HMRC once they reach £1,000 worth of sales. They may not be taxed on £1,000 if that's not profit, but they have to complete a tax return. 

To clarify, a private seller is one who is just selling off their own personal items such as clothes from their wardrobe, bits from their loft/garage etc.

A Business seller is someone who buys or makes items to sell on. 

[scottel2011]

I buy and collect items ,mainly 4k movies, blu-rays etc,  sometimes i buy them , watch them and sell them on, not necessarily at a profit in fact at a loss most of the time, sometimes i keep movies for a year or 2 and move them on whenever something comes up in the house i need to pay for , i currently have 966 movies in my collection , surely if i decide i want to sell them at some point to make space or to claw some money back to pay a new fence or door, i shouldn't be penalised for selling my personal possessions, i work full time and have done for 30+ years , always paid my taxes

[turtley_worth_it]

You won't be. They are personal possessions and not chargeable to tax.

It's important for everyone to remember that nothing has changed here in
respect of tax laws, simply that eBay and others are now required to send
information to HMRC. What they then choose to do with it is another matter
but even if they chose to look into your selling you would not be charged a
thing if you are disposing of your personal possessions that were not
bought with a view to profit.

End of story.

[mawels_87]

Would this he classed as selling for profit? I purchased a cheap wind-up Sekonda chronograph watch for about £20 or so in the early 1980s for my own use. It has been in a box of mixed stuff and been stored in my loof for years. About two years ago the same watch model were selling for £400 to £500 on eBay. Currently they have been selling for £600 to £700. Even badly broken ones sell in the £100s. My one after getting it down out of my damp and cold loof is in very good condition and still working good 100%. I'm not likely to sell it less than I paid in the 1980 when its will sell well in the £100s. 

[lucy_farmer]

Nope, that's still just your own old stuff  that you don't want anymore.

Tax man won't give a hoot about it or you.  Unless by some amazing mega burst of good fortune it sells for over 6 grand!! 😂.  then you'd be liable for CGT.. (though I think that's a little unlikely....)

[jckl1957]

Selling a single watch that you bought for your own personal use decades ago would not incur a tax liability, even if you sold it for more than you paid for it.

However, if you had a history of selling watches, and had sold hundreds of watches in the past year or so then, if you came to the attention of HMRC, they might well consider you were trading and would look at all of your sales in the light of that point of view.

[mawels_87]

Thanks. I find all this HMRC very confusing and wonder if it's now worth selling anything. I don't want to have to try and prove anything with tax man if they come asking. If I had to pay tax I would rather pay it as I go.

[turtley_worth_it]

They not gonna care one jot about you. Keep selling your stuff. As I've
said before, nothing at all has changed here in law. It's not as if they
didn't know who was selling on eBay beforehand, everyone's sold items are
there to be seen. It's simply a data sharing requirement now and makes it
easier for them to catch the big fish taking the Michael. Those are the
folks who need to be papping themselves, that's if they weren't declaring
it beforehand.

[quickdispatch]

The question is, what is your intention when buying goods that you resell? If it is to make a profit then it is a business. If your total sales are £1000 or less in a tax year then these do not need to be declared despite being a business. You can sell an unlimited value of your own personal goods, for example attic clear out, wardrobe clear out, your household goods or anything you have collected over the years completely free of income tax. Yes, EBay will notify HMRC if you go over the threshold but as long as you can show HMRC that they are your own personal items, all is fine. You may have to pay Capital Gains Tax on any single item realising £6,000 or more (with the exception of your private car). 

[mawels_87]

From what I understand governments actioned this new policy with selling sites like eBay and Vinted to help stop tax  aviation caused by the new generation of private sellers brought on by the Covid lockdown where most people were confined to there homes for months, and also to help genuine tax paying businesses from going out of business due to this. Covid lockdown thought started a new generation of people taking up new hobbies where broken items are now being fixed and collected, or sold on for a small profit the help ends meet. A lot of genuine businesses have been doing very well out of this new trend as buyers have been paying quite high prices for those often broken collectables. Businesses selling spare parts have been doing very well too because of this new trend. Much of this stuff would have just ended up in landfills if wasn't for the COVID lockdown. I guess we will all slowly now return to paying in the increasingly high taxes for landfill sites instead.

.

[sml192]

The new reporting rules have absolutely nothing to do with Covid. 

[game_raid]

Exactly, the tax rules were always there, they are just being enforced now.

The days of making a few quid to supplement an income has come to an end, it may be just a hobby but if that hobby of buying and selling is turning over a £1000 you may need to pay tax and the HMRC certainly want to know about it either way.

As a nation we pay too much tax as it is but you can see why they enforcing it now, they must have lost 100s of Millions in unpaid tax from marketplace sellers over the years, it's even more annoying that our tax is just wasted but that's another issue.

[notonlymars]

I've been a dedicated seller on eBay for 7 years, offering a range of items—from charity shop treasures and old electronics to used kitchen goods and house removal items. I've always valued the support of our local buyers and the community, but there are several persistent issues that have not been addressed by the platform:

• Minimal Dispute Resolution Support:
  When conflicts arise with buyers, eBay consistently claims it’s only a platform, leaving me to handle disputes on my own without any real assistance.

• Invasive Data Collection:
  Recently, under pressure from HMRC, eBay has started collecting sensitive personal data, such as my National Insurance number. This step feels more like a tactic to dodge governmental penalties than a measure to protect my interests.

• Excessive and Unfair Fees:
  Over the years, various fees have gradually chipped away at my profit margins, contributing to an increasingly unbalanced system where the platform seems to benefit at my expense.

• Buyer Protection Policy Abuse:
  The platform’s strong buyer protection policies often leave sellers like me vulnerable. I frequently face issues such as fraudulent claims or unjustified returns, without sufficient safeguards in place to protect my side of the transaction.

• Skewed Dispute Processes:
  The internal dispute resolution procedures seem to favor buyers. This bias leaves me with little recourse in situations where I know the transaction was handled fairly on my end.

• Lack of Legal Accountability:
  eBay’s stance of not being legally bound by the transactions effectively strips me of any meaningful legal recourse when problems arise, making it difficult to enforce agreements or seek justice.

• Forced Compliance with Regulatory Demands:
  The new requirement to provide personal data, seemingly driven by a desire to avoid government penalties, forces me into a situation where my privacy is compromised, yet no corresponding benefits are offered to protect my selling rights.

• Market Inequality and Power Imbalance:
  Overall, the platform's policies and operational structure create an environment that systematically disadvantages sellers. Despite my long-term commitment and the community’s support, I feel that eBay prioritizes minimizing its own risks and costs over actively protecting and supporting its sellers.

Given these challenges, I believe it might be wise for sellers to consider alternative strategies—perhaps even adopting measures like using pseudonyms or an incognito mode—to protect our personal information and interests. It’s frustrating to see that, despite years of loyalty and hard work, the issues that affect our ability to sell and thrive on eBay remain unresolved.