Selling a car and HMRC

[kingsway99]

We are selling our old car and recommendations suggest Ebay.  It will be around £2k which is above the limit for reporting to HMRC.  Although it's a different listing format I assume Ebay still report car sales - is it going to be worth the hassle or would I be best sticking to word of mouth/marketplace?  I would rather take a bit less money than have the hassle and expense of getting accountants to sort everything.

[lucy_farmer · Accepted solution]

I don't think selling your own old car is in any way interesting to  HMRC.

If everybody had to get accountants involved every time they changed car it'd be bureacratic mayhem...

[fargvs]

Unlikely that HMRC will be interested if you are selling a privately owned Car.

Best way to sell a Vehicle --- Using a PC/Laptop  (using Mobiles/Apps listings often fail) and these links > 

 https://www.ebay.co.uk/help/selling/listings/listing-tips/selling-classified-ads?id=4167&st=3&pos=2&...

https://www.ebay.co.uk/help/selling/fees-credits-invoices/motors-fees?id=4127

https://www.ebay.co.uk/help/selling/fees-credits-invoices/setting-changing-payment-method-fees-selli...

 Vehicle listing fees are charged for each listing/relisting whether sold or not and are non refundable ---Classified Ads. at total fee of £19. 99 will allow the exchange of contact details for viewing and price negotiation over a 30 day period --- set the Start price at or near the price that you would find acceptable --- Avoid inviting Offers which may never be completed --- just continue to Negotiate an acceptable selling price and only remove the Ad. when you have a definite buyer with Cash in hand or a  Bank Transfer is safely deposited/confirmed before handing over Vehicle keys/documents on buyer collection. No further FVF selling fee is charged.

[cbclassicbuyer]

I can guarantee HMRC most definitely won't be interested in the slightest if you're selling your own car. 

[sml192]

Assuming the car is being used for personal use then there won't be any tax implications. 

If you do decide to try selling it on eBay then I would definately use a classified ad rather than a standard Buy it now or auction. 

[4_bathrooms]

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@kingsway99 wrote:

It will be around £2k which is above the limit for reporting to HMRC.

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Are you referring to the digital sales reporting thresholds?

[kingsway99]

Yes it is the digital sales reporting thresholds I'm concerned about.  

[wintersdawn1]

Example — selling unwanted items

You’re clearing out your attic and decide to sell your unwanted items using online marketplaces. None of the items you sell are worth more than £6,000.

It’s unlikely that you’ll need to tell us about this income or pay any tax, no matter how many items you sell.

If you sell an item for more than £6,000, you may need to pay Capital Gains Tax. The £6,000 value for a single personal possession for Capital Gains Tax, also applies to the total value of items which form a set, for example:

• chess pieces

• books by the same author or on the same subject

• matching ornaments, such as vases or statuettes

https://www.gov.uk/guidance/check-if-you-need-to-tell-hmrc-about-your-income-from-online-platforms#s...

• If you are selling unwanted personal possessions such as old toys or clothes, this would not be classed as trading or miscellaneous income, and there is usually no tax to pay. In some circumstances there may be capital gains tax when selling valuable items such as jewellery, this is covered in our flowchart.

https://www.litrg.org.uk/news/selling-online-make-sure-you-keep-clear-records

Do I have to share information with HMRC?

From January 2024, new UK digital sales reporting rules require digital platforms like eBay to share information with them. However, this reporting doesn’t change your tax obligations.

On eBay, this should only affect newly registered accounts in 2024, which will extend to all accounts in 2025.

eBay will only report if you pass certain yearly sales thresholds:

• If your total sales on eBay exceed €2000, or roughly £1740, after fees.

• If you complete 30 or more sales transactions on eBay.

In general, selling personal items is not taxed if they’re below £6,000 and you’re not selling as part of a business.

https://www.ebay.co.uk/sellercentre/selling/selling-online-and-hmrc

[4_bathrooms]

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@kingsway99 wrote:

Yes it is the digital sales reporting thresholds I'm concerned about.  

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I'm really not sure if classified ads count towards the threshold or not. The OECD's model rules suggest they do but I'm not sure how eBay would know whether a classified ad had resulted in a sale or not as the transaction is finalised off the platform.

If you want to avoid any chance of being asked to hand over your NINO and having your details sent to HMRC you'll need to use purely offline means to advertise the vehicle as the OECD rules apply to all online platforms that facilitate sales of goods and/or services.

Just to be clear there is no tax liability for selling a personal vehicle. If you sell the vehicle via a classified ad you may or may not be asked to provide your NINO and eBay may or may not send your details to HMRC. Regardless, you would have no tax liability for the sale provided the vehicle was your own personal vehicle (i.e. not registered as a taxi, commercial vehicle etc.) and there would be absolutely no need to employ an accountant.

[kingsway99]

Thank you all for your replies.

[weeblesfall]

Is anyone able to say for certain whether a classified motors ad would result in being asked for your NINO? The price listed in my classified advert would be higher than £1740 (the annual digital sales reporting threshold), but payment would be made outside of eBay. I realise that selling my used car wouldn't be of concern to HMRC, and I do not use my eBay account for any kind of trading that could be liable for tax. However I will not provide my NINO to eBay on principle and I want to avoid any chance of being asked for it. TIA

[jimthing]

If you're selling a private car, you are exempt from capital gains tax (CGT) in the UK.

They also don't count towards IHT (inheritance tax) and most other things tax related, so shouldn't be relevant here on Ebay for the new HMRC NINO (National Insurance number) collecting, even if Ebay ask you to give it to them and you then have to anyway. 

However, if you are selling a van, sports car, commercial or business vehicle, you must report your sale to HMRC. 

https://www.car.co.uk/media/blogs/general/road-tax-when-selling-your-car-complete-guide

[sml192]

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@weeblesfall wrote:

Is anyone able to say for certain whether a classified motors ad would result in being asked for your NINO? The price listed in my classified advert would be higher than £1740 (the annual digital sales reporting threshold), but payment would be made outside of eBay. I realise that selling my used car wouldn't be of concern to HMRC, and I do not use my eBay account for any kind of trading that could be liable for tax. However I will not provide my NINO to eBay on principle and I want to avoid any chance of being asked for it. TIA

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I don't think anyone will be able to give a definitive answer at present.  However, my interpretation from reading the page on 'Knowledge of Amount' in HMRC's 'International Exchange of Information Manual', and in particular the last paragraph, is that a sale using a classified ad on eBay would not be reportable as the 'Consideration' (amount paid) would not be 'known' or 'reasonably knowable' given the advertised price is only there as a guide and the actual sale is completed outside of the platform.  If the sale is not reportable then there would be no requirement to obtain the seller's NI number. 

https://www.gov.uk/hmrc-internal-manuals/international-exchange-of-information/ieim901730

IEIM901730 - Knowledge of Amount

The reporting rules work on the premise that Reporting Platform Operators (RPOs) only report Consideration if they know the amount that has been paid or credited to the Seller. If the Platform Operator (PO) does not know how much the Seller has received for a relevant activity the payment is not treated as Consideration. 

This could provide opportunities to circumvent the rules if an RPO claimed that it did not know the amount paid to a Seller as that payment would not have to be reported. To prevent this, the definition of Consideration includes references to an amount which is ‘reasonably knowable’ by the PO.

A PO may reasonably know the amount of Consideration where it can use available information to calculate or determine the amount payable to the Seller. For example:

• the PO receives or withholds a fee or commission calculated by reference to the amounts paid by users;
• the PO assumes contractual obligations in respect of providing the Relevant Activities, such as providing refunds or other forms of buyer protection;
• the Platform provides functionality which shows the terms of agreement between users and Sellers including the amount of the underlying Consideration;
• the Platform provides visibility over the amount of Consideration to the PO.

  A PO is also expected to consider and take into account the knowledge of any service providers or other POs about the amount of the Consideration. For example, if a PO subcontracts the processing of payments to Sellers to a third-party service provider, it would be expected to reasonably know the amount of Consideration from the information available to the service provider about the payments made to Sellers. The RPO would need to ensure that the contractual arrangements between it and the third-party service provider facilitated its access to the information.

  The PO does not have to know the amount of Consideration at the time that a Seller is providing goods or services. There may be cases where the PO knows the amount of Consideration only after the Seller has provided the relevant goods or services, or when the payment has been made.

  Where the Platform only lists a guide price or an estimated amount for the provision of goods or services, the PO may not be able to determine the amount paid or credited to the Seller. If the PO does not know the amount paid or credited to a Seller, and cannot determine the amount from reasonably available information, the Consideration condition is not met and there is no reporting obligation.

[abigailbunny1]

My understanding is that with car sales you are paying eBay to place an ad, much like you would with Autotrader or the local newspaper.  eBay will have no oversight of whether the sale actually took place as they don't handle the financial side of the transaction, hence nothing to report to HMRC.

[weeblesfall]

So I wanted to get a definitive answer on whether a classified motors ad of over £1740 (the UK Digital Sales Reporting threshold) would result in eBay asking for your NINO. I have phoned eBay and spoken to a specialist on the subject:

YES, even "off sales" - sales where money is transferred outside of eBay (therefore including classified ads) - are still counted towards the £1740 threshold, meaning eBay could well ask for your NINO.

Obviously that doesn't entail you'd have to pay any tax - odds are you probably wouldn't. But for those of us who'd rather not have HMRC snooping into their eBay account, you may want to think twice about using eBay to sell your car now.

[papso22]

Sorry but I snorted at the idea of an 'ebay specialist' on digital reporting (or indeed almost anything).

As ebay have no idea of the sales price and no involvement in the payment processing, I think it's covered by the 'knowledge of amount' exemption.  

[kingsway99]

We have decided to seel our three cars and go down to two newer ones.  As we have owned all three for so long there is no way we could be thought of as traders so will go via Ebay if they don't sell on Marketplace first.  Thanks for all your helpful replies.

[weeblesfall]

I agree, but even if the representative I spoke to is wrong, there are plenty of other platforms for selling cars which aren't signed up to Digital Sales Reporting, so I won't risk using eBay to sell a car.