My other account Suspended for refusing to change to a business seller

[**foxytori**]

So, it has begun. Despite me not trading, not selling anything new, not selling anything in multiple, and only selling personal items (currently I am selling my collection of Radio Times which I built up over many years when I was younger - most of which have now sold anyway so any future sales would be minimal) my other account has been suspended for selling. I am told this is because of volume of sales (despite ebay's own help pages stating that someone can sell tens of thousands of pounds worth of a collection and not be liable to tax or be classed as a business).

As I am in no way a business, and it possibly may be against the law to masquerade as a business when I am not a business, I'm really not sure what my options are. 

Customer service are useless (I have just received a message in very poor English to say that I have lost any appeal and the only way to lift the suspension is to "upgrade" (sic) to become a business seller.

[notstopbuying]

It will be a very interesting time on the business seller forums, if eBay introduce zero FVF fees for all private sellers. 

[pg_kicks]

I honestly think very few would care if it was genuine private sellers, if you or anyone else wants to sell a pair of Air Max 90 you bought then havent worn I dont have an issue, my issue starts when people have 10 pairs in sizes ranging from 6 to 11 dont offer returns and use the 70% off promo and thats just 1 colourway, majority have 300 listings all brand new trainers in different sizes. I think thats the same for 99.99% of business sellers who often highlight the illegal accounts who come on and either complain they have had to accept a return or ask why they should upgrade.

If they just kept the same token messages and handful of forced upgrades whilst allowing people to get free selling and breaking the law then yes it would be a poop sandwich being served to business sellers who pay the fee's.

[myriad*seller]

There is always someone who tries to game the system though

As soon as they bring in a new restriction, new loopholes or people gaming the system  appear

Just like all the Chinese sellers now buying private seller accounts so they can list without being VAT registered 

[pg_kicks]

Then eBay need to act on the policies and stop people breaking them, loopholes are legal ways to do things, operating on a private account when you are a business isnt a loophole, its illegal and to me and people within the law a loophole isnt illegal.

The Chinese sellers need to be stopped too, again if eBay actually acted upon policy breaches and followed their own policies stricter it wouldnt be an issue. Majority of things which annoy people on here could be solved if eBay knew/cared about the issue.

[myriad*seller]

Yes, I agree, loophole was the wrong word

I meant the equivalent of the difference between tax evasion and avoidance I think...

[rare_treat]

I don’t think people are doing it to evade paying tax – which is a crime – but just to take advantage of using eBay private sellers accounts instead of a business one.

Unless you sell under a different legal name, from a different address, using a bank account not linked to you, and always access via a VPN, then eBay can know you’re the same person. And they will pass that on to HMRC. (I don’t know about foreign sellers, but this would definitely apply to anyone based in the UK.)

On this account I put in the wrong year when I set it up, and after two months (I think I reached about £1000 in sales), they put my account on hold because I failed ID checks. Correcting the year made the issue go away. Meaning they knew exactly who I actually was!

As far as I can tell – and correct me if I’m wrong – the only legal difference in business vs private (forgetting tax, which I mention above), is businesses have to accept returns for change of mind within 14 days, and there’s more restrictions on the item being “fit for purpose”. Personally, I believe the first is unfair to online sellers, who have had to pay to post the item. And if someone decides an item is not what they were expecting, then they will seek to return it, and, even if you’re a private seller, eBay will inevitably rule in their favour.

[kempseykate]

Business sellers also need to have their contact details on the listings - and the only way you can do this on ebay is by having a business account.

[rare_treat]

Oh, okay. How is that meant to help the consumer, do you know? Especially if you don't have a retail unit they can pop along to. My address goes out on each postage label as the return address anyway.

[pg_kicks]

Thats the main one but you also need to have contact details available prior to any contract being agreed, which you can only do on a business account. It means I've basically had to get a new sim and number otherwise my personal number would be online for anyone to contact, at any time, whilst you and I may think sending a message at 4am or phoning is mental believe me I've had it and I get 2 or 3 messages a month from random European numbers offering goods for sale.

Bottom line though is its illegal to trade on a private account if you are a business, even if you accept returns every item listed you are breaking the law (general you not saying you are a business).

[dch2112011]

This ebay page will explain what you are obliged to do as a business apposed to a personal seller

Business Seller Policy 

[dch2112011]

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@rare_treat wrote:

Oh, okay. How is that meant to help the consumer, do you know? Especially if you don't have a retail unit they can pop along to. My address goes out on each postage label as the return address anyway.

It helps customers by reassuring them you are a bone fide business not a bogus company - it notifies the consumer of all of the company information including registered office, trading address and email and phone contact details prior to parting with any money.

You are also obliged to display your businesses terms and conditions and return policy which you are bound to provide and trade under.

You are also required to display VAT number if registered 

SEE BELOW

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Business sellers on eBay.co.uk are required to display their contact details to comply with the Electronic Commerce (EC Directive) Regulations 2002. This requirement is fulfilled by completing the Business Seller Information section in their account, which automatically displays their contact details and address on their profile page.
Reason
Communication
Buyers and sellers need to be able to communicate with each other. Incorrect contact information can lead to problems like unpaid items, negative feedback, and eBay Money Back Guarantee cases.
Compliance
Business sellers must comply with all government regulations, including providing contact information.
eBay takes the privacy of its members seriously and generally doesn't allow user contact information to be published or displayed on its site. For example, eBay replaces buyers' email addresses with aliases to hide personal contact information.
Contact information in listings policy - eBay
Requirements for business sellers The Electronic Commerce (EC Directive) Regulations 2002 - opens in new window or tab requires bu...

eBay
Business seller policy - eBay
Business sellers are required to follow all government regulations, including registering as a business on eBay, and providing contact information

In the UK and in Europe, there is a legal requirement that businesses have to display their contact information, in their listings and it is against the law to hide this information or pretend not to be a business.

[rare_treat]

Thanks everyone for the info.

That is fine when there is clear indication that a seller is reselling just for profit. Like in the example of selling large volumes of the same item, or big variations in size of the same trainer, over and over again.

But it isn’t always clear if someone is selling for profit or to resell items they don’t want.

For me, I guess a few items fall in a grey area.

For example, if I buy a bundle of collectibles, where I only want to keep a few of them. I then resell the other items individually. The total back is less than what I paid, so technically I haven’t made a profit. I just have the items I wanted at a very cheap price.

Even more confusing, what if I’m given a bunch of collectibles by a friend for free. I sell the items I don’t want. In one way, it’s all profit, because they were free. In another, I now own the itema, and they do have value. So if an item could be valued at £3, for example, and after postage & fees, I only get back £3, have I really made a profit?

eBay can and will make their decision on the matter, and that will always lean towards what is more profitable for them. If they wanted me to operate as a business, it wouldn’t be worthwhile, so I would have to stop selling here.

The Government just care about getting their cut in taxes.
In my case, even if I sold every collectible I own this tax year, I still wouldn’t make enough profit to pay any tax on (because of the personal allowance).
The consumer rights stuff they don’t really care about unless someone makes a complaint. And eBay’s feedback system, and their tendency to settle on buyer’s side, means you can’t fall too fowl of consumer rights even as a private seller.

What could be the consequences (beside tax related) if the government decided you were a trader? Could you get fined (or worse) for not offering returns, or listing your contact details?

Tell me to shut up if I’m going off topic and/or boring people.

[dch2112011]

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@rare_treat wrote:

Thanks everyone for the info.

That is fine when there is clear indication that a seller is reselling just for profit. Like in the example of selling large volumes of the same item, or big variations in size of the same trainer, over and over again.

But it isn’t always clear if someone is selling for profit or to resell items they don’t want.

For me, I guess a few items fall in a grey area.

For example, if I buy a bundle of collectibles, where I only want to keep a few of them. I then resell the other items individually. The total back is less than what I paid, so technically I haven’t made a profit. I just have the items I wanted at a very cheap price.

According too HMRC you as the seller need to have used the items or owned them for 6 months before selling them

Even more confusing, what if I’m given a bunch of collectibles by a friend for free. I sell the items I don’t want. In one way, it’s all profit, because they were free. In another, I now own the itema, and they do have value. So if an item could be valued at £3, for example, and after postage & fees, I only get back £3, have I really made a profit?

According to HMRC if you are selling them on behalf of someone else outside of close family you are deemed to be selling them for profit in this case 100%  profit  including fees and postage - because you are claiming not to be a business you cannot deduct business expenses. You would have to prove they were a gift and that you owned them for 6 months before selling them and convince HMRC that you were not obtaining the goods with the intention to sell them.

eBay can and will make their decision on the matter, and that will always lean towards what is more profitable for them. If they wanted me to operate as a business, it wouldn’t be worthwhile, so I would have to stop selling here.

Ebay have written policies which they are obliged to enforce one way or another 

The Government just care about getting their cut in taxes

Absolutely correct perhaps if people declared and paid the taxes due their would be no need to cut the pensioners winter heating allowance !

In my case, even if I sold every collectible I own this tax year, I still wouldn’t make enough profit to pay any tax on (because of the personal allowance).

Correct but if you are classed as trading you are obliged to declare this and all other income from any source so that HMRC can assess your liability for taxes

The consumer rights stuff they don’t really care about unless someone makes a complaint.

Not quite correct Trading Standards are a powerful organisation and not only react to 'complaints' but also proactively look to take action against rogue / bogus traders - furthermore a consumer can take independant action against anyone deying their rights through the court system starting at the lowest court 'small claims'

And eBay’s feedback system, and their tendency to settle on buyer’s side, means you can’t fall too fowl of consumer rights even as a private seller.

ebay's user agreement is in addition to legal rights and is not a substitute - all legal rights remain enforcable - it is against the law in the UK  to deny consumer rights 

What could be the consequences (beside tax related) if the government decided you were a trader? Could you get fined (or worse) for not offering returns, or listing your contact details?

HMRC could issue a penalty for non declaration  going back to when they deem that you started trading  

Failure to submit a return £100 up to 3 months after due date increases thereafter

innaccurate deliberate returns carry a penalty of up to 100% of the tax owed less if it was an error

Failure to notify HMRC both for Income and capital gains the penalty is equal to the tax owed including VAT 

For not complying with legal requirements you risk a fine up to imprisonment even in extreme cases seizure of assets  depending on the offence commited and the process dealing with the offence, civil or criminal 

If you are genuinely operating within the law as a personal seller then you have absolutely nothing to worry about - you will be able to satisfy any tax enquiry and win any consumer action and meet any ebay account decision

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[rare_treat]

Thanks for the detailed response @dch2112011.

I didn’t know that owning for 6 months rule, so that’s handy to find out.

Just so were clear, I’m not and have not tried avoiding declaring any income I’m legally permitted to. eBay will do it on our behalf anyway, as they’re legally obliged to, so I know there’s no point even trying. And I agree with the tax system. (Well, except higher earners should pay a lot more – but we won’t get into that!) That’s why I specified “consequences (beside tax related)”, as that is straightforward to me. I guess clarifying it may help others.

I will never do this as a business. When I decided to start selling at the start of the year, I saw it as more of a hobby that got me back some money, rather than costing me.
I’ve taken the time on my listings. I’ve come up with decent titles and descriptions – including taking time to research and note where loot box items originally came from. I like to take decent photos of my items. I’ve given away a lot of (lower value) items as free gifts with purchases, without promising to. All of which is very time consuming (and cost money), and the opposite of what you would do if you were looking to treat it as a business.
In hindsight, I wouldn’t have. I would have sold the higher value items on here, kept a lot, and given away the items I really didn’t want (especially those I had duplicates of). In monetary terms, I would have earned more p/h working in a factory in a third world country!

Taking into account the “scare” you’ve just given me (I believe I’m pretty safe, but who would like the thought of even possibly being probed by HMRC or Trading Standards, just for selling some collectibles online) I think I am going to cut back on selling this year; and stick to the £1000 limit next financial year. I’m pretty sure that was going to happen anyway – as this has been far more time consuming than I ever could have imagined – but this was just the push I needed to make the decision.

Thanks again.

[dch2112011]

I was not judging you just offering information relating to your questions raised.

There is advice from HMRC  relating to collections on how they are assesed but they seem to relate to valuable collections rather than hobby collections if that makes sense.

Personally I feel that it would be impossible for HMRC to 'investigate every seller reported for being over the reporting threshold - pure logistics would indicate that would not be a reality.

So how this is handled internally by HMRC is still a mystery - it may be that internally they only  look at certain patterns - maybe if a seller has been selling for a long period or is a registered business or has exceeded the threshold by x percent  who knows?

The criteria for being classed as a trader is not well defined and could be applied differently depending on the circumstances of each individual .

It may spark no response from HMRC, it may mean a letter asking you to confirm that you are selling personal items, it may mean a request for a tax return initially before any further questions are asked.

I feel that they will target the larger sellers because these are likely to bring a return tax wise,'

An individual with no income selling £1500 of possesions is not going to be of much interest as the biggest return would be the tax on £500  that is if their personal allowance was exceeded. 

They may want you to file a return but if your total income was below the tax threshold they would almost certainly tell you not to submit another return unless your circumstances changed. 

This is because spending any time looking at a return with no tax return has no benifit to HMRC whatsoever.

Consumer rights are entirely a seperate issue as to some extent is ebay deciding on who can use which account

[rare_treat]

Thanks again @dch2112011 .

Perhaps you can clarify a question that now has been bouncing around my head from something you mentioned earlier.

So, because a private seller is not a business, they cannot deduct business expenses, does that mean even if I sell £1500 worth of collectibles for less than I paid, then HMRC would still see the £1500 of sales as being fully taxable?

A simple example: I buy a PC for £1600, decide it’s more than I need (and would like to recoup some money), if I sold it 6 months later for £1200, HMRC will say that I now have to declare that (as it’s over the £1000 limit), and that they would treat it as taxable income? So, if I had reached my tax-free limit, they would expect me to pay 20% / £240 tax on a PC I’m already losing money on?

Or am I totally confusing myself now?

[dch2112011]

Ok  the £1000 limit is an allowance for trading so if you are classed as a business you can claim the allowance but all your sales would be at gross value  without deductions. You can of course opt to deduct expenses and not use the allowance - generally this would only be viable if you had all the purchase receipts, buyers details etc 

If you are a business  and insist you are a personal seller all of your sales are assesed as profit  ie the gross amount that you sold them for because you are claiming not to be a business you cannot deduct business expenses therefore the only avenue would be the allowance

If you are assesed as a genuine seller of personal items you would not be assesed for tax nor would you be required to submit a return.  There are conditions for Capital Gains tax but this is hardly relevant to your activities

[dch2112011]

Reporting limits do not automatically class you as trading -  it also could follow that if you were classed as trading by HMRC  to submit a tax return it does not necessarily follow that you are a business in terms of selling for profit.

It is very complex and it might be worth talking to a tax accountant for clarification of your own situation.

As far as I can see if you inherited all of a relatives possessions and sold them over say two years every week for a total of £20,000  you may be suspected of  trading under the information published by HMRC but this may be to get you to submit a return to gather all of your income to see if further  enquiries are needed and whether depending on the information you will be classed as a trading or not.

[rare_treat]

Okay, I think I understand. (It is late, and I should have gone to bed already really.)

eBay will inform HMRC when a private seller’s total sales exceeds £1000. But, as long as that seller is genuinely selling their own items, not selling for profit, then HMRC will not expect them to declare it as taxable profit to them. So, in my reselling a personal PC for £1200 example, they wouldn’t expect that to be declared.

In my case, it is still a grey area (I didn't know about the 6-month rule). And because I have nothing to lose be declaring my sales total to HMRC this tax year, I will do it. Because I don’t want to be seen as a business (as I’m not), the total amount of sales will be taxable, no matter how much (little!) money I actually recovered from those sales.

Does that sound about right?

[dch2112011]

Anything you sell that is personally owned and used by yourself  resold for less than you paid for it is of no interest to anyone but yourself.

If your 'new' items have been bought for resale then they should be declared - however  any preowned unused items in their original packaging or without packaging although defined as new are commercially classed as used because you are reselling a personal item without guarantee not as a retailler would for profit - ie you are selling them for the same or less than the original purchase price.

The six months is a yardstick mentioned by HMRC for measuring whether an item has been purchased to sell at a profit or an unwanted 'new' personal item - How strict this six months will be will possibly be dependant on their suspicions and the number and multiples of new items being sold, strangely you can buy to sell for profit one item if it is in short supply  and it will not count as trading !

If you are worried ring HMRC and they will give you general advice