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.

[turtley_worth_it]

You may get a letter but an enquiry into your affairs is simply that, an enquiry. Cue the discussion and your clear, competent, and completely innocent explanation of selling your own personal items. This is not trading. Any such enquiry would be closed without any tax due. You have absolutely nothing to worry about.

The revenue are not monsters looking to rinse compliant taxpayers dry. They are there to tax the evasive, the greedy, and the down right deceptive.

You can rest easy and if you, or anyone else, gets a notice of enquiry, don't panic. 

[*vyolla*]

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@turtley_worth_it wrote:

The revenue are not monsters looking to rinse compliant taxpayers dry. They are there to tax the evasive, the greedy, and the down right deceptive.

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Being familiar with the HMRC section on Money Saving Expert's forum I am going to beg to differ there, there have been some downright out of order scenarios on HMRC's part, guilty until proven innocent and utterly unhelpful. 

[turtley_worth_it]

There are always scenarios and stories. And yes, being in the trade for a lengthy time you do come across some unhelpful inspectors. That doesn't equate to dishonest. And if one believes they are being assessed incorrectly, there is of course an appeals route. This chaps scenario as described is not in any sense trading. Stop putting the willies up him unnecessarily please.

[cue27]

My question is this....the reporting  to HMRC starts Jan 2025 and ebay states it will provide data for that calendar year. ie from Jan 2024. But elewhere Ive read that it is the tax year (April to April...) I am confused...does anyone have a definitive answer?

[dingledell2fishingbaits]

If you buy to sell and make a profit your a Business.

If you sell your own household items at or below the price you paid that is a private sale.

Have word with an accountant dont work in the dark.

[floral.lines.supplies]

No, an end of business sellers masquerading as private sellers and not paying their tax or giving their buyers correct consumer rights.

If you buy to sell then you're a business, sell personal belongings then your private.

[dingledell2fishingbaits]

Accountants are quite good  explain your predicament , it will take the stress off you.

some charge a tiny fee others will give free advice see how much they charge it could save you lot.

PS if you do online banking all your monies paid into your account by ebay wil be there plus the shipping you have paid out . 

[dingledell2fishingbaits]

Get an accountant

[rainbowtrax]

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@cue27 wrote:

My question is this....the reporting  to HMRC starts Jan 2025 and ebay states it will provide data for that calendar year. ie from Jan 2024. But elewhere Ive read that it is the tax year (April to April...) I am confused...does anyone have a definitive answer?

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The new legislation kicked in on Jan 1st so ebay will report on an annual basis starting from that date.

The tax year runs from April to April so I would imagine that HMRC will know which tax year to assign the data to. Guessing online platforms will have to let HMRC know how much falls into each tax year.

[dingledell2fishingbaits]

Figures count

[cornish_girls_collective]

Hello.  My situation is similar to yours.  I sell for friends, I sell my own clothes and buy designer items from charity shops to sell on.  My query is this, someone on this thread said the £1,000 tax free threshold is for the fiscal tax year 2022/2023 but up to now I was under the impression that it's January 2023 until the end of this year.  Now I'm confused.

[double_o_heaven]

The £1,000 limit is per tax year - 6 April to 5 April following.  The reporting requirements £1700 ish for companies like eBay seem to run calendar year for some reason (possibly because some EU countries have calendar tax years?)

Anything you sell for friends will unfortunately form part of your turnover for this limit.

[floral.lines.supplies]

If you're buying clothes from the charity shops with the intention of selling on then your trading as a business, make a £1000/01p over then you should be registered with the HMRC and filing your self assessment.  Any personal items should be keep separate.

[rainbowtrax]

@cornish_girls_collective  Looking at your completed listings, you've sold just under £300 of items in December so probably around £400 once you add on the postage charges. But it's impossible for us to know which were personal items and which were business ones to advise whether you should have already been keeping records and declaring your trading to HMRC. 

It's always a good idea to keep the two separate for this reason. If a fair few of your sales were business and that's a representative month then you'll have gone over the threshold as it works out at less than £100 a month trading turnover (that includes the postage you charge buyers). When you trade, you also need to adhere to distance selling legislation such as accepting change of mind returns and displaying your contact details (on ebay, only available on a business account).

But yes, the trading allowance is for a tax year but the reporting begins from January. My guess is that trading platforms will let HMRC know how much falls within each tax year.

[pennypop.1304]

I still don't understand is the limit 30 number of Sales or £1700. I will never reach £1700 selling my small bits & pieces, but I could go over 30, could you please clarify, thank you 

[*vyolla*]

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@pennypop.1304 wrote:

I still don't understand is the limit 30 number of Sales or £1700. I will never reach £1700 selling my small bits & pieces, but I could go over 30, could you please clarify, thank you 

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eBay will be passing on data to HMRC automatically if you're selling 30 or more items a year OR have total earnings over the equivalent of £1,770 (whichever you reach first).  eBay will automatically share this information with HMRC by 31 January 2025.

Even though the above data is being shared, it doesn't mean that you will owe tax if you're a private seller.

[janeandsteve]

So, I always thought tax was paid on profits not turnover?

[papso22]

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@janeandsteve wrote:

So, I always thought tax was paid on profits not turnover?

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You thought correctly.

[vintagetoys2u]

Forgive me for being thick but why is is £1700 p.a. being quoted on this platform when both HMRC and  Ebay notifications  advise £1000 trading allowance as a maximum ?

Whatever the right amount is, it's worth pointing out that technically, the allowance covers other income gained from Fairs and boot sales etc as well.

[double_o_heaven]

The £1,700 (or 2,000 euros) is the reporting limit above which trading platforms have to share your sales data with HMRC.

The £1,000 limit is the trading allowance HMRC gives you each year before you must "report" yourself.