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.

[papso22]

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@reidscott1 wrote:

So I can sell as many of my own items as I like as long as none of them indivually raises over £6000?

That isn't the impression I;ve taken from others posts in this thread and others but would be delighted to be corrected. 

Thanks.

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https://www.gov.uk/capital-gains-tax

[reidscott1]

Having totalled up my outgoings (the cost of the CDs, packaging, post costs, etc) it's doubtful that I will even have broken even this year on the actual discs I have bought and then sold on.

The total 'turnover' however will be over the £1000 threshold and I usually acieve 30 sales (from my own belongings and CDs bought that I'm then seling) every fortnight or so. It feels kind of pointless reporting all of this but there's always a risk of investigation if I don't and I've nothing to hide so it makes more sense to self assess and end up paying (basically) nothing in tax anyway I guess.

[reidscott1]

Thank you. I've read the page on the link and appreciate it says 'item' not 'items', but even this piece from The Times muddies the water by clearly indicating that sales from each asset should be combined.

(That said, I will be nowhere near the £6000 limit either way, as that is based on profit and not turnover)

Calculating what you owe

To figure out what you need to pay in capital gains tax, you need to:

• Calculate the gain for each asset that you have disposed of in the tax year, which runs from 6 April to 5 April the following year
• Add up the gains and deduct any allowable losses, such as those you made when you sold other assets
• Deduct the capital gains tax allowance of £6,000 (or £3,000 for trusts)
• If you are selling a property and paid for any home improvements that don’t count as maintenance. You can deduct this cost from your taxable gain
• You can also deduct estate agent and solicitor fees

[ett1954]

@reidscott1   Ignore the press, most reporters don't know their ar*e from their elbow in these matters and they only serve to confuse or sensationalise.

Check out HMRC's website where everything is set out.  If you are still unclear then ring them for advice.

By your own admission you are trading and as such should be correctly registered on eBay, however, in addition, if you are trading and your sales income (before expenses) exceeds £1000 you should be completing a self assessment with HMRC.  It is irrelevant whether you are making a profit or a loss.  If you are making a loss you may even be able to offset your loss against other taxes you pay, providing you have the correct supporting documentation.

[reidscott1]

Thank you for your reply. With that in mind, I will never be liable for Capital Gains Tax, which is very much appreciated.

The reason I have not made my ebay account into a business account is that the vast majority of my sales are from my own collections and not from anything that I've bought to sell (from the approx £6000 that will go through the account this year including postage, just over £1000 including postage will be from items I've bought with the intention of selling on).

If I make the account into a business account then it appears that everything I'm selling is from trading, which is not the case. In many ways this actually takes me back to my initial question as to how to distinguish between the two. I appreciate that having two accounts would possibly be the way to go, but purely for convenience I'm loathe to go down that route but appreciate it may be the way I have to go. 

[seanvideoman]

for any small time/part time sellers on ebay

follow the new rules

do what hmrc require

for the sake of filling out the hmrc self assesment online form  will take 15 mins as long as you have kept records for the year you will have peace of mind

keep your records of what you have earnt or loss for 6 years

you do not have to submit anything bar your total figure for the year and your total profit or loss

the monthly figures are for your own workings and hmrc do not want to see them unless they audit you.

keep you records by the month

make up your books from 1st april 2023 to 31st march 2024 it is easier on record keeping and there is a section on hmrc assesment that you can put these daes are where you are submitting your accounts for

official tax year is 6th april to 5th april following year

fill out the tax form / if you make a loss / be truthfull and put it down as a loss / they will not mind or query it / the following year if you make a profit you can offset the loss you made this year to negate tax payable the following year

but fill out the form even if it seems jobsworth just for peace of mind and worrying about any hmrc letter coming through the door.

the capital gains tax i have seen written on here / ITS A RED HERRING / unless you sell a van gogh left in your relatives will / undeclared income tax is what hmrc is after

[papso22]

That £1,000 of business sales needed to be sold on an ebay business account.  You then keep the private ones on a private account. 

The business account is a legal requirement, not a choice. 

[reidscott1]

Thank you.

In essence my question is - I sell mainly personal items and some items that were bought for resale, both through my own personal account. Do I have to  now move that to a business account and if I do, will it not look like all of my personal sale are actually business sales, when they are not?

Therefore, do I have to now run two accounts and move all of the business items I have listed to the separate/new account? And if so, would I be better doing that at the start of the new tax year or now (doing it now feels like it waill make things more confusing). I don't want to be breaking any rules, but appreciate that I may have done so inadvertantly.

Through the advice I've recevied here, I now have every intention of self assessing on the items I have bought for resale but not on the items I have sold from my own personal collection.

[seanvideoman]

yes

there is no capital gains tax to be paid on 99.99999999 of things sold on ebay

does not matter if you earn £6666 selling 100 items /you pay income tax on the profit that you have made on that money

you do not pay capital gains tax on it

[seanvideoman]

because it is small ammounts / it would be easier to combine the 2 together as 1 figure

you will have paid more for your own personal items that you sell but combine this higher figure for items bought with the lower figure that you paid for items you bought solely to make a profit on and then your overall price paid for items will be right and mitigate your profit

one word of warning for all small time sellers on ebay when you change over to a business account from a personal account on ebay royal mail will not refund any item they lose of yours unless you have the orginal receipt .

all they give you is a few stamps as compensation

bare that in mind as imagine having to find a receipt for a cd/dvd/shoes etc etc that you bought 10 years ago

[reidscott1]

So, I should change my account over to business and still keep everything listed on that account even though the vast majority will be personal sales and I won't be including them on my self assessment?

I'm getting more confused here, not less. lol!! Thanks again for all your help.

[papso22]

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@reidscott1 wrote:

So, I should change my account over to business and still keep everything listed on that account even though the vast majority will be personal sales and I won't be including them on my self assessment?

I'm getting more confused here, not less. lol!! Thanks again for all your help.

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No, you should open a new business account and move all the business listings on to that one.  This is not a tax issue, it's a consumer law issue.  Businesses cannot abide by consumer law requirements with an ebay private account. 

Your private sales will remain on your private account.

[reidscott1]

I will. Thank you.

[cornish_girls_collective]

Thank you for replying. I am surprised that you can see my personal info on how much I've sold.  A bit scary!  

[houseroom1]

Hi I haven't seen anyone's details. I replied to one post and then all posts from then on have been sent to me rather than the original contributor.
Best wishes
Marlena

Sent from Outlook for Android<>

[rainbowtrax]

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@cornish_girls_collective wrote:

Thank you for replying. I am surprised that you can see my personal info on how much I've sold.  A bit scary!  

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@cornish_girls_collective  All I did was look at your sold listings. Anyone can see what any seller has sold. It's one of the search filters so the info's there for everyone to look at any time they want to.

[jow1995]

with 4.7k items sold, thats an aweful lot of personal items. Very surprised you think its difficult to view. 

[ett1954]

Sizes 8 through to 22.  They have my sympathy ............... I have the same problem controlling my weight.

[houseroom1]

Did you intend to address this to me? 

[papso22]

You need to look at the thread, not just the notifications showing on your phone.  Then you can see who is being replied to.