I've sold 97 items for £4500 this tax year

[skulkraken]

Hi all,

I'm a private seller. I collect graded Pokemon cards as a hobby, I have collected for around 5 years now. I also have ADHD, a severe spending problem and quite a bit of credit card debt.

I tend to buy items that I like the look of, then, anywhere between 6 months to 5 years later I'll sell them to free up some money to buy more things I like. I do not buy items with the intention of selling to make make money.

Of the 97 items I've sold, about half of them I've made a small profit on and about half of them I've lost money on. The Pokemon card market went really high in 2020/21 and has been falling ever since. Some items I bought for £1000, I'd sell for £300 many years later.

I'm guessing, that of that £4500 in sales, about £500 might be actual profit. It's difficult to say for certain, because I haven't been keeping records. I haven't been keeping records and I never considered this a money making excercise.

Now, to HMRC, 97 sales that are all in the same catergory are going to look like a business. Even though I've barely made any actual profit. Sometimes I'll buy an item for £100 and sell it for £100, 6 months later...

Should I contact HMRC to explain the situation. I'm guessing that I'm going to have to fill out some sort of tax return? Never done one of these before as I've always been employed.

Please don't be mean in the replies.

[1956glyn]

I could easily spend 5k in around a year on items that i have changed my mind on or no longer need 😂  probably jewellery.

Shirl

[skulkraken]

"Sounds like you are buying to sell". How did you come to that conclusion?

I like an item. I buy it.

I then get bored of that item. I sell it.

Sometimes I sell it for more than what I paid for it.

Sometimes I sell it for less than what I paid for it.

Sometimes I sell it for the same amount as what I paid for it.

It's no different from buying a bunch of video games, completing them all and then selling them all. Is that trading? Is that buying to sell? No. I bought them because I enjoyed them. Now I no longer enjoy them.

For me, I get a dopamine hit from buying stuff and then it arriving at my door.

[skulkraken]

I have ADHD and no children. I get a dopamine hit from buying stuff. I rarely make a profit when I sell, I mostly lose money.

[*vyolla*]

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@skulkraken wrote:

Sometimes I sell it for more than what I paid for it.

Sometimes I sell it for less than what I paid for it.

Sometimes I sell it for the same amount as what I paid for it.

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Then simply keep records of what you paid for your items and what you sold them for and then, bottom line, if HMRC do request that you complete a self assessment you'll have all of that information to hand. 

[kempseykate]

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@*vyolla* wrote:

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@skulkraken wrote:

Sometimes I sell it for more than what I paid for it.

Sometimes I sell it for less than what I paid for it.

Sometimes I sell it for the same amount as what I paid for it.

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Then simply keep records of what you paid for your items and what you sold them for and then, bottom line, if HMRC do request that you complete a self assessment you'll have all of that information to hand. 

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And how does that work if you are selling stuff you bought before ebay was a twinkle in Pierre's eye? Stuff that you bought for your own use/collection, that you now no longer want? Do you still have receipts for every item you ever bought - or can you remember the price you paid? I know I can't.

[jckl1957]

It won't work for everybody but it will work for the OP - 'graded Pokemon cards' have only been a tradable commodity for a relatively short period of time.

[skulkraken]

That depends on what you would call a "short period of time". The first Pokemon cards were graded with PSA in 1999 (25 years ago). However, graded Pokemon cards didn't really start taking off until 2008 (which was still 16 years ago).

I bought my first graded cards in 2015 but only really started collecting seriously in 2019. At the time I really didn't think to keep receipts, as I didn't expect the Government to go hard on people selling their personal belongings in ebay.

[*vyolla*]

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@kempseykate wrote:

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And how does that work if you are selling stuff you bought before ebay was a twinkle in Pierre's eye? Stuff that you bought for your own use/collection, that you now no longer want? Do you still have receipts for every item you ever bought - or can you remember the price you paid? I know I can't.

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Me, personally? No.

However, I was responding to the OP, who says that they've been doing this for 5 years so they should still have access to most paid prices. 

[insidethe93]

Is HMRC only interested if you've made a profit??

[insidethe93]

5K personal items isn't hard if you're, say, a crafter or a collector 🙂

I'm in the middle of re-indexing my craft dies, craft stamps etc. I own at least 1K of each. (Don't get me started on other supplies...) Amongst crafters, that's not a particularly large number.

[insidethe93]

You buy an item. You know you're going to sell it at some point, and you do sell it - it's not me you need to persuade, but HMRC. HMRC is the worst, can seem like a law unto itself (spoken from experience) and if it takes against you, best of luck.

[keeptheroof]

This is rubbish, a private individual is under no obligation to keep records of what they buy or sell. 

This is why all this nonsense about paying taxes is just that - nonsense. The taxman will have to show evidence of your trading - where you bought it, what you paid, your costs, and the profit you made - to even claim you owe tax. 

[*vyolla*]

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@keeptheroof wrote:

 The taxman will have to show evidence of your trading - where you bought it, what you paid, your costs, and the profit you made - to even claim you owe tax. 

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Anyone who has dealt with HMRC will tell you that it's not up to HMRC to provide evidence of where an item was bought, price paid and profit. It will be down to the individual to provide that information if requested.

You're correct though, a private seller shouldn't need to provide this information, what I'm suggesting is that a seller such as @skulkraken who may be perceived as a trader simply keeps some records just in case. That way all bases are covered. 

[bits_n_bobs_heaven]

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@kempseykate wrote:

I was waiting for you to pop up. I don't need clarification, thank you. This is our own stuff - no grey area here at all for me. I would think we have bought 5k of books alone in our lifetimes! Maybe you keep your wife on too tight a rein?

I have been on here for 24 years - so that's approx 3½ items a week! It isn't just me - the rest of the family have all had various collections over the last 70 years!

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I agree with you totally! I too am in the same boat and just finished totally decluttering the house, giving loads away to charity shops but keeping good quality items, often never worn or used & listing have decided to list those items on eBay. Why shouldn't I? These  items are all my personal unwanted items / gifts purchased or given to me over a number of years!

Like you, I know exactly where I stand and really don't need the clarification or assumption from anyone.

There is, however, an assumption that because we are in a living crisis, the average person just wouldn't have much to give away or sell on. However, middle aged people who may be decluttering, down sizing, or who have had relatives pass on, more often than not, end up with an abundance of items that need to find new homes 🙄.

Far better for items to be passed on one way or another than end up in land fill, that's for sure!

[bits_n_bobs_heaven]

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@1956glyn wrote:

Hi

You said "a severe spending problem and quite a bit of credit card debt"

May i make a polite and constructive suggestion......cut up those credit cards until you have made extra cash by selling and got the balances down.   Its easy to get into the spiral of using cards too much 😞

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Very good sound advice, that's for sure. Advice that many could do with, espcially if their debt continues to mount up with unecessary purchases:-(

[1956glyn]

We have a huge collection of Pokemon Cards.  May i ask what year they were first released? 

I remember when we first  had a Pokemon shop in the city centre and every week i took my  son to buy a few packs 🙂   He was probably about 9 at the time from memory.

Nope i didnt keep one receipt 😞  

[tressygirl]

Just asked my friend Mr Google,  and it seems the first set of cards were released October 20th 1996.

Where has the time gone ?

[1956glyn]

I did originally type i thought J was about 6 and then changed it lol   I am pretty sure that his cards are 1st editions.    I think i need to research them all as i know some are very valuable.  

[rigged_out]

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@insidethe93 wrote:

Is HMRC only interested if you've made a profit??

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If you're a private individual then HMRC will just assume any income received from eBay is just that, an extra income. You have no cost of goods or expenses. They will just calculate what tax you owe based on the ebay payouts. 

If you want to offset that by claiming costs for goods etc then it's just a matter of filling out self assessment and claiming those costs. It's quite simple. You don't have to do self assessment. You can just pay whatever tax is due on the extra income.

[tressygirl]

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@1956glyn wrote:

I did originally type i thought J was about 6 and then changed it lol   I am pretty sure that his cards are 1st editions.    I think i need to research them all as i know some are very valuable.  

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I do remember he was an ardent collector when young, and Yes,   you Must look those cards up,   I'm sure you'll be surprised at the value of some !