Questions about Turnover & £1k Tax-free allowance ?

[addmhat.18]

Hello all

since Januray 2024 i have been trying to understand the meaning of ' turnover ' in tax 

so for an example let's say i listed & sold an item for £10 (that being the sold price before a payout is sent out) and as for the payout i get about £8.00 after ebay fees.

is my turnover for this item £10 or £8 as many sites (like here) and HMRC say all different things.

on this page on hmrc that i have read for like 20 times however i see no mention of ' turnover ' its just the word income but other sites keep mentioning ' turnover ' more then income ?

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

so apart from the example that i give for the £1k allowance i have to ask is it income or turnover because to me wording matters at lot.

- thank you 

[61stephenuk]

Your turnover is the total paid including postage before any fees are deducted.

The £1000 is a trading allowance and not applicable to you as a private seller

[pillarboxred]

As far as I can tell, and it is a fog we are working in, for UK tax purposes what you should record is the total, item + postage, business incomings. What you pay eBay in commission and when you buy the postage, should be recorded as business outgoings. I don't know what the case is with the Global Shipping Programme because none of those monies comes near my bank. If you are like me at the moment you can have turnover but no profit or a loss so there is little tax, if any, to pay.

[gt_preloved · Accepted solution]

In your example, your turnover is £10. But be careful, turover is all money 'In' before deductions, so if you sold an item for £10 plus £5.50 postage, then your turnover is £15.50 (even if you actually spent the £5.50 on postage).

The £1000 trading allowance is based on the gross income (so the same £10 in your example above). It doesn't apply if you're just selling your old personal stuff; but if you've bought something to resell, then this counts as 'trading' in the eyes of HMRC (whether you do it as a business or just casually). Full guidance here: https://www.gov.uk/government/publications/selling-online-and-paying-taxes/selling-online-and-paying...

[papso22]

The trading allowance is applicable to traders, i.e business sellers, not genuine private sellers.  A genuine private seller can sell as much as they like without paying income tax.

Also the trading allowance is gross, not net, income, so turnover. i.e £15.50 in your example.

[gt_preloved]

@papso22 - you're quite correct. I've corrected my (incorrect) post above.