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.

[jow1995]

Only trying to give advice as i see it. Selling family members items is classed as business selling, not your own personal items . Your sales for the year 250 are slighlty over the 30 limit so good luck.

[keeptheroof]

Again that's rubbish. 

Come back when you have qualified AAT, ACA, ACCA, CIMA or CIPFA and we'll argue about it.

[1956glyn]

Ok so if my son (now adult) now decides to sell his  Pokemon collection....which i purchased for him when he was 6 on our account you would say this is business selling?   Somehow i do not think so.      

I think in all my time on Ebay i have sold say 3 items for my son on this account.    He is megga busy with work and other commitments so to be honest i would rather list them on our account where i have control over the listings and prompt postage etc.

Another thought........  IF i listed inherited items from our parents do you think we should pay tax on that income......even though everything was valued for Probate purposes and inheritance tax paid at the time ?   How many times should we pay tax?   

[millcottage]

Sent from my iPad

[millcottage]

You pay tax on your income.

use that income to buy a product or service and pay VAT.

die and leave that to someone and they pay inheritance tax.

if item increases in value by over £6,000 or £3,000 then pay CGT when you sell it 😂

[kempseykate]

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@jow1995 wrote:

Only trying to give advice as i see it.

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It was neither asked for, wanted or needed.

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@jow1995 wrote:

Selling family members items is classed as business selling, not your own personal items .

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No it's not - we are a household, as such we sell household stuff on one account. Are you suggesting that if we were given a casserole years ago as a wedding present, I should list the pot on my account and my OH the lid on a separate account?

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@jow1995 wrote:

Your sales for the year 250 are slighlty over the 30 limit so good luck.

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Is there any other aspect of my life you would to have your say on? Maybe I should run it past you before I do the food shop? Maybe I should get your opinion on a colour scheme for the kitchen?

On the other hand ...

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[sagr2519]

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@*vyolla* wrote:

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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That's a hard thing to ask of someone with ADHD. 

[*vyolla*]

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@sagr2519 wrote:

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@*vyolla* wrote:

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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That's a hard thing to ask of someone with ADHD. 

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I'd say that depends. I have friends with ADHD who are the best at keeping detailed records, they have amazing multi tasking brains with awesome memory recall. In some ways they function on a higher level.

However, if it is going to be an issue then that's something to factor in when selling online.  

[sagr2519]

You're right, people with ADHD are individuals and don't all have the same difficulties and strengths.

The way I understood the OP's post was that ADHD would interfere with keeping detailed records, but maybe that's not the case.

[*vyolla*]

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@sagr2519 wrote:

You're right, people with ADHD are individuals and don't all have the same difficulties and strengths.

The way I understood the OP's post was that ADHD would interfere with keeping detailed records, but maybe that's not the case.

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It's a bit off I feel to discuss anybody's personal issues here. Hopefully, the OP has enough information to be going on with now. 

Nobody here can say what HMRC will do when they receive the information passed on to them by eBay in Jan 2025. There'll be an algorithm, some of the triggers will definitely be new items in the same category. As I mentioned before I believe that a 'nudge' letter will be sent out in these cirumstances asking those sellers to confirm that they are private sellers. That should be sufficient, but who knows if HMRC will require more in some circumstances. Thus, with recent sales (and I'm talking those for 23/24 and 24/25 tax years) it would be prudent to keep some records. 

I'm a huge fan of trying to cover all bases, but if this can't be done then it can't and that's a scenario to face and deal with at a future date then.

[skulkraken]

My ADHD doesn't affect my record-keeping. However, it does mean that I have some real difficulty controlling my spending. Google "ADHD spending" and you'll see what I mean.

So this financial year I've spent around £10,000 on collectables (fear of prices going up makes me spend) and I've sold around £4500 of collectables. I've not sold to make a profit, just getting rid of the collectables that I don't want any more. This happens a lot when you impulsively buy a bunch of stuff that you don't really need, you end up not wanting half of it.

I'll have to start keeping records. Some of them I've bought at conventions and Facebook marketplace though so I don't have receipts for a lot of it.

[jow1995]

If you are not looking for advice then why post on this page? Obviously you have  had little or no dealings with HMRC. It is not down to them to prove you are selling your personal items, the onus is on yourself. if you cannot , they just estimate a tax bill for yourself to contest. All buisness/ side hustles can claim "selling personal items " without paying tax. 

Grey seems a popular colour for kitchens

[*devils.advocate*]

Isn't this a discussion board rather than just a board for advice only?

[kath3735_wxmjn]

this is a discussion forum so advice is not always what is wanted or needed.     So just why do you think you are the only one who knows anything about HMRC?   My guess would be that most of us at some time or other have had personal dealings with them or had family members who have.

[double_o_heaven]

Some of us used to deal with HMRC every day and get paid for it...  but that was 20 years ago so I am hesitant to offer too much "advice" nowadays.

[jow1995]

No doubt there are many more sellers on here who are far more converse with HMRC TAX  selling laws. 

just trying to share my personal experience how the system works .  Just read the reply from vyolla, spot on

[keeptheroof]

No private individual is under any obligation to keep these records. And HMRC is unlikely to look at anything other than the blindingly obvious when it comes to tax owed.  

That's one of the big problems with people in this country, they accept everything an official might tell them. People need to learn to stand up for their rights while they still have any rights. They come, you argue, they summons you, you appeal, and you'll only win if they don't have rock-solid proof that you did something wrong and in most cases even then they have proof you intended to do wrong.

[bravergrace]

Regardless of HMRC, it's sometimes a good idea to keep some sort of records/receipts when you buy expensive things for personal use, in case you need to make an insurance claim, for instance.  Obviously this is easy if you buy them online, or pay by bank card.  But if it's just for personal use, there's no need to get carried away and waste hours making ledger records of low value purchases.

Incidentally, I do think the conversation on this thread has become a bit personal.

Some people buy lots of stuff, others get gifts.

Some of my family members have managed to accumulate large collections of stuff over the years.  A few hundred vases/owl ornaments/shoes/bow ties/board games/LPs...some people collect things, others don't.   This doesn't make them traders.

[theelench]

"No private individual is under any obligation to keep these records"

That's because the position of a private individuals selling their own possessions has never been subjected to widespread intervention by HMRC before.  When I first became Self-Employed I was given a free course in Commercial Book-Keeping by the DOE. 

The lecturer started the course with a question.  "Why bother keeping books / records at at?"

Answer:  Because they are your DEFENCE if HMRC query your tax return.

For the first time ever HMRC is going to be provided with sales evidence for every seller on ebay that exceeds a couple of (pretty low) thresholds that they CAN, if THEY want, be used to start an investigation.

You have ABSOLUTELY NO EVIDENCE for the statement  "And HMRC is unlikely to look at anything other than the blindingly obvious when it comes to tax owed." 

Perhaps you haven't noticed that the tax burden on ordinary people is now the highest since WW2?  That the govt. is so desperate to increase tax revenue that thresholds have been frozen and fiscal drag allowed to rip.  That people on benefits and pensions are now commonly paying tax.  In other words the govt' is out to get every penny it can and is using unprecedented Draconian measures to get them.

My GUESS is that this will be used progressively and increasingly retrospectively.   Year one, the low fruit will be the grabbed but after that the bar will be lowered year on year.  Eventually it will become automatic  --  Sell over 30 items / £1700 the "request" to file a tax return will arrive in the post.  

And as has been said already, HMRC has to prove nothing.  It is common practice for them to Assess your liability for tax.  It is accepted, even by courts, that it is the tax-payer who has to prove that they do not owe whatever HMRC says they do.

[insidethe93]

Unfortunately I doubt that HMRC would be sympathetic.