HRMC

[wckdstrom]

With regards to paying tax What if you’re selling on e bay at a loss  just to recover some of your money . for instance  trading cards can go up and down in value so how can the taxman work out what’s profit if I don’t have invoices 

[cbclassicbuyer]

HMRC don't work out your profit or loss, you do. Then you submit a self assessment annually to HMRC and then taking into account all other incomes, HMRC tell you what tax you owe, or don't owe, depending on your income and circumstances. 

[papso22]

If you have a potential tax liability and can't prove the cost of something to HMRC's satisfaction you can't offset the cost against the sale proceeds, so will owe tax on the sale proceeds.

The first question though is whether you meet HMRC's badges of trade.

[wckdstrom]

Thanks for your reply ,I’ve been PAYE all my life and filling in
assessments fills me with dread

[crg_music]

You are clearly not trading as a business so just dont get carried away with how much value you do sell, a few bits now and then does not make you a business even if god forbid something you bought 20 years ago actually went up in value. I guess this is the key factor, intent. If you go out and buy something with the sole intention of making a profit then you are a business but if you bought something a while ago and just selling bits you no longer want or need and made a bit you are not a business. Ive heard people stating time periods where you can reasonably say you didnt buy something to resell such as 6 months but im not sure its that simple.

Even if you did have to do a tax return I think theres a £6k allowance on personal items which is a fair bit, I dont remember how its presented but dont be scared of hmrc, they are actually surprisingly helpful and you are not the person they are gunning for.

Saying all this a lot of people are in fact businesses but just dont realise they are because they do it from the sofa. If you walk around a bootsale on Sunday, buy £50 of bits and sell on ebay a day later for £100 then that £50 is taxable. Lot of it really does come down to intent.

[lucy_farmer]

'Even if you did have to do a tax return I think theres a £6k allowance on personal items which is a fair bit, '

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Ah, that's the Capital Gains Tax allowance. This applies if you sell  one item* (vehicles not included!) for over 6 thousand.

Which is pretty unlikely on ebay 😆 ( and, frankly, the thought of selling something that expensive on ebay fills me with fear 😰.)

(*There may be qualifications to the one item thing when it comes to collections-stamps/coins/etc)

But on the whole, wckdstrom , as crg says above, it doesn't look like you are HMRC's target audience. So don't worry too much. 😊

[crg_music]

I was always confused about the 6k thing.