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.

[ukhaberdashery]

"we have to no the law, and the law said that people who are accusing u"

God help us.

[ett1954]

@1984jo  "No but I am a criminology student"

My advice: keep studying - you may learn something.

[kempseykate]

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@myriad*seller wrote:

From the OP from the thread I linked to 

I've received an email from ebay forcing me to switch to business account due to the volume of my recent sales. Customer service explained that I exceeded £1800 in one month, so they act in line with new HMRC regulations

As I said, the registration trigger is now automated by eBay, as soon as sales exceed £1700 or 30 items, eBay are requiring sellers to change to business 

https://community.ebay.co.uk/t5/Business-Seller-Board/Ebay-forces-upgrade-to-Business-due-to-new-HMR...

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That is not correct. If it was, most sellers on ebay would have to register as a business.

There is a deal of difference between £1,700 or 30 sales a year and your example of £1,800 a month, from someone who was very obviously trading.

I am already over 30 items this month on my other account (low value items from a past collection) and have not been told to upgrade to business ... and if I was I would simply bin the rest of the collection and leave ebay.

[jow1995]

thanks for sharing , seller  had less than 800 feedback in 12 months so certainly not high volume, but still prosecuted.  Many sellers need to be made aware of whats in the pipe line, many sellers i speak to have no idea about the new rules.  The "hobby "sellers with 1000s of feedback please take note.

[ukhaberdashery]

Feedback could though just be them buying items.

I like to think I keep my ear to the ground about ecommerce on ebay, etsy and Amazon and even I did not know about all this coming. I only heard last week when a family member asked how it would affect us..... ? "What thing?"

So at this present time there must be thousands out there (dare I say millions) of sellers who dont know about  this.

I didn't see a message from ebay (I wonder if it was because thousands would leve the platform the next day). And to this day have not seen it mentioned anwhere else ie bbc news etc.

[*vyolla*]

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@jow1995 wrote:

thanks for sharing , seller  had less than 800 feedback in 12 months so certainly not high volume, but still prosecuted.  Many sellers need to be made aware of whats in the pipe line, many sellers i speak to have no idea about the new rules.  The "hobby "sellers with 1000s of feedback please take note.

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Ah no, that seller had multiple accounts, they made in excess of £100k. They had no argument there at all.

[*vyolla*]

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@ukhaberdashery wrote:

I didn't see a message from ebay (I wonder if it was because thousands would leve the platform the next day). And to this day have not seen it mentioned anwhere else ie bbc news etc.

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There's an announcement from eBay to the right of this page under Announcements and, in all fairness, eBay aren't required to explain any HMRC changes to sellers, this is something that's down to them to keep up with.

The online selling platforms aren't obliged to inform users of this, and Vinted and Etsy haven't. 

The BBC and all of the papers did cover it, as did many radio shows (and some of them got it wrong).  There's also a piece on Money Saving Expert.

The day this was announced 'Vinted' was trending' heavily on social media, so many must've seen the HMRC announcement.

[myriad*seller]

The law has not changed

Anyone selling items they bought, grew or made to sell (and food delivery guys/AirB&B owners etc) who has an annual gross turnover of more than £1000 (including postage) is required to complete a Self Assessment

HMRC are just ensuring that people who "forgot" or claim they "did not know", will be complying with the laws that have existed for decades. 

People trying to evade this, may have their previous years turnover inspected very closely by HMRC from now on. 

[1984jo]

I think it because a lot of people are getting confused between stuff they brought and the next day put on eBay for a profit and the stuff they buy to keep wear and some time later decided to get rid off. So stuff u buy to sell u have £1,000 before I have to declare, and your own personal stuff (and I have lot) u can sell has many items has u like or got and no issues as long as on item goes above £6,000 (CGT). But I can see why people are getting confused, because I was but i understand a bit better that I selling my stuff so there no issue and also nothing changes because if there is a issue I not going to no about until next year so want is the point in worrying now. 

[myriad*seller]

Yes, people are struggling to understand the difference between buying/making/growing to sell = trading and selling your own second hand unwanted items (not trading)

The confusion arises as eBay are telling everyone they will be reported to HMRC when they exceed £1700 or 30 items, regardless of whether they are trading or selling their own items (not trading).

As there are so many fake "private" sellers on eBay people are getting very confused. 

If they are in any doubt, they don't need to worry, if they owe tax, HMRC WILL let them know, and send them the bill, as eBay will supply all the info they need. It will then be up to sellers to complete a SA to reduce the tax that HMRC have calculated they owe, as if they fail to submit a SA the tax bill will be based on gross turnover, so they have an incentive to declare correctly, as they can offset expenses off the gross sales total. Which will mean they only pay the tax they owe, not the tax HMRC will estimate they owe based on sales turnover. 

[1984jo]

And I guessing 95% of people are not doing anything wrong and will not own anything. Also like I said nothing going to happen until next year anyway so may has well not get to upset about it, but it does seem people are completely stressed out about it, my brother who got eBay account said he closing his down because he does not want the headache of this but I tried to say it ur own stuff u can sell it and it does not matter but he still closing it down, and I guessing he not going to be the only one. 

[prettyunique1]

Good luck to DWP checking my eBay sales for the last 7 years as I got splattered by car on my motorbike and didn't sell anything for 9 years

[myriad*seller]

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@Anonymous wrote:

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.

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They can go back 20 years, not 7, if they suspect fraud or failure to declare earnings

You seem to have forgotten to register as a business seller on eBay 

eBay will pass your sales details to HMRC once you sell 30 items or more

[reidscott1]

I have/had large collections of my own (CDs, records, football memorabilia, magazines, comics, badges), built up over the past 40 years and have been breaking these down and listing a lot of items over the last 3 years to begin to clear them and not leave huge issues for my kids once I'm gone. Nearly everything I've sold will have been sold at a price less than was initially paid for it. I won't meet the £6000 threshold for selling private items but will be WAY over the 30 items per year limit (2200 buying (the majority of which has had no intention of re-sell) and selling feedback built up over the last 3 years, currently over 700 items listed).

However, I have during that time bought bulk lots of CDs so that I can keep say the 10 from 100 that I want to own and then have been selling on the rest. That amount doesn't come to over the £1000 per year limit to qualify me as a trader (I haven't even broken even on the discs I've bought last year - I re-case them in new cases to avoid negative feedback, which pretty much wipes out any profit when packaging etc is taken into acount).

Combined the amount of my selling incuding the postage charges sent to me might (but maybe won't) take me over the private seller limit. I'm confused as to what to do and concerned that what I thought was an innocent activity and way of saving money on a few CDs could be viewed as something else entirely.  

I don't want to end my selling activites, it's been fun and a good way of reducing the possessions I have without just binning them, but am beginning to feel that it might be what I have to do. Any advice would be welcome.

[sagr2519]

Use a separate account for the ones you buy to sell further

[reidscott1]

But if sales/accounts are going to be monitored through NI numbers/bank accounts then it will all lead back to the same place anyway will it not?

[sagr2519]

It will, but at least you will be able to explain that transactions on account A are personal sales and those on account B are business sales. If account B totals less than £1000 including fees and postage, then you don't need to pay tax.

[*vyolla*]

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@reidscott1 wrote:

However, I have during that time bought bulk lots of CDs so that I can keep say the 10 from 100 that I want to own and then have been selling on the rest. That amount doesn't come to over the £1000 per year limit to qualify me as a trader (I haven't even broken even on the discs I've bought last year - I re-case them in new cases to avoid negative feedback, which pretty much wipes out any profit when packaging etc is taken into acount).

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This would technically qualify you as a business trader, so to keep everything above board I'd open a second eBay selling account and register it as a business account. I'd then list these CDs on that account and keep your other private account for listing your own CDs from your collection.

Whilst you may well sell more than 30 CDs on the new account, you won't need to complete a self assessment tax return unless you make £1,000 in sales in a tax year (that's sales, not profit). You can also offset expenses against a tax return if you do need to complete one. 

[reidscott1]

Thank you for your reply.

It would take a bit of time to split my personal and 'trading' accounts but I appreciate the sense that would make going forward, thank you.

What would I do regarding this tax year's sales? I have a complete list of everything I've sold that has been purchased and then sold on.

[*vyolla*]

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@reidscott1 wrote:

What would I do regarding this tax year's sales? I have a complete list of everything I've sold that has been purchased and then sold on.

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You'll need to do the math for that - the next tax year we have to report on is April 23 to April 24, and any self assessment for that tax year needs to be completed online by Jan 31st 2025.