Open another account - Tax

[1984jo]

Hope some can help with this. 

With this TAX thing, I no I don't need to do anything different when it comes to selling my own stuff but what do I do about stuff people have given me. Someone I no gives me even so offered a couple of black bin bags full off clothes, shoes and toys, I am not paying for them and I not giving her any of the money (she does not need the money), she just gives them to me. She will not donate them has she will not give to charity shop has she says she not paying for CEO high wages. Do I set up another account and sell it separate from my own personal stuff or can I just sell it on my own account. 

[btr.style]

One could argue it's your own things as they were given to you, rather than you seeking them, so only subject to potential capital gains tax if high enough turnover was reached. 

However I'd go with it's selling to profit. If I found something on the street, took it home, cleaned it and so on, I'd be doing so for profit. So if your sales of these things (before taking off postage, eBay fees etc) exceeds 1k a year, then yes you'd need to declare it via self assessment tax return. 

[*vyolla*]

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@btr.style wrote:

One could argue it's your own things as they were given to you, rather than you seeking them, so only subject to potential capital gains tax if high enough turnover was reached. 

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Capital Gains tax wouldn't be relevant here unless the OP sold a personal possession with a value of over £6k.

See HMRC's page here for confirmation of that:

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

[*vyolla*]

 Once you sell 30 or more items a year OR have total earnings over the equivalent of £1,770. eBay will automatically share this information with HMRC. See eBay's guidance page below:

www.ebay.co.uk/help/account/regulatory/uk-digital-sales-reporting?id=5454&st=3&pos=1&query=UK%20digi...

Even though the above data is being shared, it doesn't mean that you will owe tax if you're a private seller, though I suspect that HMRC may send you a nudge letter if you appear to be not selling off your own personal things i.e. many different sizes.

 You can have more than one eBay selling account, they will obviously be linked so the 30 item/£1770 limit will be shared between the two.

If you are selling as a business there is a £1000 Trading Allowance, and it's for small/hobby business sellers. They can sell £1000 worth of goods (gross sales, not profit) before having to declare this on a self assessment return.

[btr.style]

That's not what they asked though?

They wanted to know if selling some items their friend gave them would be classed as different to selling their own possessions and so they wondered if they needed to do anything different. 

You've copied and pasted some text, not directly answering or refering to anything they've asked. It's the parrot effect in motion I mentioned in some suggestions part of the forum, and how some mentors just want to put anything for a few extra thumbs ups. 

[btr.style]

Notice the word 'potential'. 

It's all about which way their question swings....

Either it's classed as personal possessions and subject to CGT if over a certain amount (I don't know how much they are selling do I? So it's up to the OP to check this). 

OR

As I've mentioned, it is classed as trading/making profit and so falls under having to do a self assessment if earnings are over 1k. 

https://www.gov.uk/self-assessment-tax-returns?&utm_source=google&utm_medium=search&utm_campaign=sel...

[jow1995]

You have sold 1.6k items over the years, if you have never filled out a self assestment tax form it maybe a good time to start. You may not have to pay tax but if you add up all your sales including postage the total may surprise yourself. The days of selling willy nilly are coming to an end.

[*vyolla*]

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@btr.style wrote:

That's not what they asked though?

They wanted to know if selling some items their friend gave them would be classed as different to selling their own possessions and so they wondered if they needed to do anything different. 

You've copied and pasted some text, not directly answering or refering to anything they've asked. It's the parrot effect in motion I mentioned in some suggestions part of the forum, and how some mentors just want to put anything for a few extra thumbs ups. 

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Nobody here can give them a definitive answer as to how HMRC would view this, except HMRC when the time comes, so all I can do is explain what will be reported and what may happen.

My text is copied and pasted from me, just relevant information that does apply to this OP enabling them to understand what's going to happen in order that they may make their own judgement call.

I don't know why you're making this personal - I don't need 'likes' or 'thumbs up', why do you think that anyone here is posting for that reason, out of curiosity? 

[*vyolla*]

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@btr.style wrote:

Notice the word 'potential'. 

It's all about which way their question swings....

Either it's classed as personal possessions and subject to CGT if over a certain amount (I don't know how much they are selling do I? So it's up to the OP to check this). 

OR

As I've mentioned, it is classed as trading/making profit and so falls under having to do a self assessment if earnings are over 1k. 

https://www.gov.uk/self-assessment-tax-returns?&utm_source=google&utm_medium=search&utm_campaign=sel...

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You're getting mixed up with Capital gains tax, which is a tax on one item sold that's a personal possession that sells for over £6k.

None of the OP's second hand clothes are going to sell for £6k.

If you go back to my post then you'll see that I explained about the £1,000 Trading Allowance for small/new sellers, I'll post it again below in case you missed it:

If you are selling as a business there is a £1000 Trading Allowance, and it's for small/hobby business sellers. They can sell £1000 worth of goods (gross sales, not profit) before having to declare this on a self assessment return.

[vinylscot]

@btr.style  I was happy to read your paragraph about the parrot effect. These threads about HMRC all become completely pointless pretty quickly, as people who think they know better than everyone else, posting nonsense which can only mislead or confuse, and yes, many are doing just for the thumbs-up, although I don't think we have any the worst examples of such posters at the moment. Happily, some of the most recent of such posters seem to have disappeared of late.

But then you spoil it all in your next post by stating "Either it's classed as personal possessions and subject to CGT if over a certain amount (I don't know how much they are selling do I? So it's up to the OP to check this). "

Either you know that's wrong, or at least highly irrelevant to this OP (in which case why post it?), or you don't know, and you are as guilty as all the other posters you have decried in your previous post. 

[btr.style]

I think you've misread the path of the discussion. 

I posted originally and then saw the copied and pasted stuff. 

I then saw there was an earlier post by that person. I don't think that's spoiling it with my response?

It was quoted about CGT, which I then had pointed out to me quite patronisingly the limit and even a handy link to the page about it. We don't know the limits the op is talking about so A) it would be subject to CGT for them selling their own possessions (they'd need to see they were within this figure) or B) as is likely, in my personal view, selling for profit and so self assessment rules apply. This was a direct reply to the mentor. 

I just wish there was a way here to mute certain members (as I would imagine others regarding muting me), but there's 2 who just seem to want to either be top of the leaderboard and gain a load of thumbs ups at the expense of fully reading posts and opting to judt copy and paste stuff rhsy has no relevance instead of spending the time to give a helpful response. 

Anyway, I'm out. 

[myriad*seller]

Setting up another account will make no difference 

eBay will link all your accounts together (via your ID, your address, bank details (which you have to verify), and eventually your National Insurance number) and if you exceed the allowance £1700 or 30 items they will notify HMRC

Setting up new accounts is not the loophole you think it is...

[myriad*seller]

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@btr.style wrote:

That's not what they asked though?

They wanted to know if selling some items their friend gave them would be classed as different to selling their own possessions and so they wondered if they needed to do anything different. 

You've copied and pasted some text, not directly answering or refering to anything they've asked. It's the parrot effect in motion I mentioned in some suggestions part of the forum, and how some mentors just want to put anything for a few extra thumbs ups. 

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If they were doing it for a stranger they would be classed as a "trading assistant" - so the clue is in the name. Selling for a family member, probably doesn't make a difference, either.

eBay take your TOTAL sales over all accounts, so splitting sales onto more than one account won't make any difference, eBay link ALL your accounts! It is total sales over ALL accounts that matter 

[myriad*seller]

Please read what was posted again

CGT does not apply here, UNLESS the OP sells ONE ITEM valued at over £6000 (total sales value is immaterial)

OP is selling secondhand clothes, so there is unlikely to be a single item valued at over £6000

Therefore CGT is not applicable here

What IS applicable is INCOME TAX, which, if you are employed and earning over the tax free allowance means ALL profits on eBay trading sales are taxable. Nothing to do with CGT, and everything to do with income tax. 

If someone selling on eBay is not employed, and does not receive any other taxable income, they can make up to the personal tax allowance (C£12K after expenses) without paying any tax anyway! 

[theelench]

I don't think the OP is looking for a loop-hole.

I think they're more likely confused having read a lot of posts saying they are not trading if they are selling their own unwanted possessions.   As opposed buying to re-sell.

Their question related to being given stuff to sell.  True it's free, not bought to sell, but neither is it their unwanted property in a meaningful sense (IMO).

Not an unreasonable question under the circumstances (again IMO). 

[1984jo]

Hello. I do not work as I am a student and I no I can make up to £12,000 without paying tax if it is class a income and £6,000 (CGT) on my own items but like said everything is my items, I just wanted to no if I open another account to make it separate from what is my own personal stuff and stuff someone as given me, has basically a gift or as it is a gift I can just sell on my own personal account as it makes no difference as they are now my stuff. To be fair a lot is summer stuff so probably will not sell now but just wanted to no. I not sure if I should just fill at a self assessment just in case because someone said even if it your own personal stuff just fill one out just incase but when I went on there government site it said I do not need to do anything.

[*vyolla*]

@1984jo 

I'd ignore the capital gains tax mentions here because it only applies if you sell one of your own possessions for more than £6,000.

You can open another account if you wish, many sellers have more than one selling account.

However, nobody here can tell you what will happen in Jan 2025 when eBay report to HMRC. My personal opinion is, that in cases like yours is that they'll send you a nudge letter asking you to confirm that you are a private seller listing your own personal possessions. Again, I would say that if the sizes of the clothes differ wildly then this may trigger further questions from them. 

I would have another selling account for the clothes you've been given, that way you're covered - if HMRC do decide that you're a small trader and you have sales totalling more than £1,000 you can then complete a self assessment just for that account, and it will be easy to work out what expenses you can claim then (eBay fees, postage etc). 

[theelench]

Should that be a second private account?

[*vyolla*]

If we're talking about a couple of bin liners of old clothes, shoes and toys then yes, I reckon so. I've no idea what volume and how many differing clothing sizes there may be, but the OP will then be covered if HMRC decide that they're a trader, and they can easily put together their accounts for that tax year as they'll only be basing them on the one account.

 HMRC will have an algorithm in place to pick up traders who are buying and re-selling from boot fairs and charity shops, and certainly there are loads of clothes sellers on eBay who fall into this category and should be trading on a business account. How sensitive this may be is anybody's guess, it will likely be based on volume, new items and fluctuating sizes. It's a case of wait and see what happens in 2025.

[*devils.advocate*]

Nobody here can give you a definitive answer - only HMRC can.

Why not give them a quick call before you start - then you’ll know and be able to proceed with confidence?

Better to go into all this with your eyes wide open rather than with your eyes wide shut and it coming back to bite you - and bite you hard.