Why am I getting pressured to change from private seller to buisness

[cherrylips74]

I am disabled,  I sell on average less than ten items a month. No set particular item as most surplus to my requirements or I have bought and decided to sell on for a small profit ie a second hand item etc.

I haven't had any issues since I came to ebay 2008 and have had 100% feedback in all this time.

Suddenly this month ebay have started treating me appalling.  Eg when try to list an item under health and beauty it turns around and says I can't list any more high end products...ie Declor for example.  Stuff I have bought myself and no longer need or want .

I CONTACTED ebay who were useless and fobbed me off with a .gov link to a email address who apparently suppose to deal with setting limits . Am like why are you assuming am a buisness? ID Be pretty rubbish if only sold 5 items month....secondly the total in £ is less than £1500 in 90 days what sort of buisness would that be ...pretty rubbish...am just absolutely mad as hell how they will not help or listen or mediate with this other apparent government agency who apparently advised such limits never heard anything so ridiculous in my life...it applies the restriction if I want to list trm under health and beauty...if I list it under Misc....or joblot it adds the item.

I am also fed up with how my items when listed do not come up in search bar yet other sellers do despite paying extra to promote the item.

Frustrating when for eg I was selling an item at £30 and no views yet exactly same item different seller selling at £50 had 21 watcher....which makes me think ebay are getting greedy and manipulation is occurring as obviously if they sell higher item more fees for them!!! 

Any thoughts help appreciated 

[moldosgifts]

I'm unclear as to why the opening post started off with mention of being disabled 

I can hazard a guess its first thing mentioned in the majority of their 4357 purchases.

I get at least one message a day metioning "I'm disable or it's for a birthday can you get it here tomorrow" not for free i cant .

The worst messages are offering such a low price 80% off asking price.

But biggeswt thing that get under my skin is private business sellers.

Keep up mentoring

[yorkshire*flower]

I must say it is my pet peev.

Private sellers with side hustles to earn tax free cash, sound harmless but  times that by the tens of thousands of listings on Ebay,  all taking money from honest business sellers who pay their taxes and adhere to all the regs.  For it to be said that businesses sellers need to "up their game" by theelench is astounding.

My profits are down massively to 10yrs ago, so many ppl online undercutting for "small profits" that go into their pockets, disabled or not, is thankfully coming to an end and hopefully come 2025 these ppl will soon realise their side hustles have to stop or become legal.  Private sellers can sell their used items but stay in that lane, if they want to sell for profit then get their business in order and abide by the same rules as all the other business. 

[destructor23]

Can I ask a possibly stupid, but purely hypothetical question?

What happens if a private seller is selling 10 items a month, all different items, but the value of the items is averaging at £8 per item.

This well exceeds the 30 items per year limit, but is under the 1000 limit or 1750 limit, not entirely sure what it is to be honest.

I guess it's still reported to HMRC and then it will be down to them as to whether they want to investigate or not?

[4_bathrooms]

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@destructor23 wrote:

Can I ask a possibly stupid, but purely hypothetical question?

What happens if a private seller is selling 10 items a month, all different items, but the value of the items is averaging at £8 per item.

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Absolutely nothing. Even if the seller is trading (and only doing so via eBay) HMRC aren't going to be remotely interested. The £1,000 is a trading allowance; i.e. you can turnover up to that amount in a year without being required to register for self-assessment. The ~£1,700 or 30 items is a reporting threshold that was set by the OECD (not HMRC).

If the obviously personal items are removed from the OP's sold items they only sold circa £250 worth of goods; i.e. nothing HMRC would be interested in. The OP's problem was likely selling new high-end cosmetic products as this would have almost inevitably attracted a VeRO request from a brand owner at some point so eBay intervened first. The drink they sold probably didn't help either as to sell anything intended for human consumption a seller needs to be registered with their local authority and have a hygiene inspection etc.

I'm actually of the opinion that if someone is below the trading allowance threshold they don't need to sell via a business account until they are required to register for self-assessment. Other than VeRO or policy violations eBay aren't going to care and neither are HMRC nor Trading Standards. The allowance is there so someone can dip their toe in the water and if it doesn't work out no worries; there's no tax to pay. I would only be remotely bothered if someone went over the threshold, knew they were trading illegally via a private account (even if they were declaring their income) and decided to carry on regardless.

Anyway; I'm guessing the OP has decided to leave eBay entirely so probably won't read this reply.  

[theelench]

One small point and I'm happy to be corrected if I'm wrong.

You said -

"The £1000 is a Trading Allowance; i.e  you can turnover up to that amount in a year without being required to register for self-assessment."

My understanding is that, as a Trading Allowance a seller would have to register for Self Assessment and then claim the allowance against their declared turnover / profit figures ??  

A private seller can't just ignore their first £1000 of sales and, for example, sell £2000 of goods and think that HMRC will automatically reduce that by £1000.  They won't unless the Allowance is claimed ?

[kempseykate]

The Trading Allowance does not apply to private sellers.

If a private seller sells £2000 of goods, that is their total sales, £2000. IF they are a private seller they don't need to declare/pay tax or fill a SA form for any of this. 

[dch2112011]

That is a very simplistic view reality is that the trading allowances and number of items are the catalyst for HMRC to make a decision as to whether you are trading or not, it seems that HMRC may consider the number of items you sell and the length of time you are regularly selling as part of their decision process. 

For this reason HMRC may require Tax returns and explanations to be submitted to prove trading or not as the case may be.  

No doubt selling on ebay or any other platform will flag up potential trading based on volume and total value - it would be naive to presume that simply stating I am selling personal items would suffice to avoid enquiry.

Obviously each potential trader will be judged on a case to case basis and will depend on the response to any enquiries to each individual. 

Ebay will have their own criteria for judging whether a member is classed as trading which is more difficult to appeal against -  ebay will be seen to support HMRC and proactively force members to register as traders as their own criteria is reached, this will catch some innocents but will catch the mahority of traders using a personal account

[kempseykate]

Simplistic or not, the Trading Allowance does not apply to private sellers. 

If HMRC decide someone is trading as a business then they might be able to make use of the TA because they are a business.

From:  Tax-free allowances on property and trading income - GOV.UK (www.gov.uk)

"You can get up to £1,000 each tax year in tax-free allowances for property or trading income from 6 April 2017. If you have both types of income, you’ll get a £1,000 allowance for each."

[bobby-dazzler-bargains-2015]

Very well expained, thank you on behalf of all hardworking business sellers!!

[dch2112011]

Correct but you are missing the point - to establish whether you are trading or not  - HMRC need and will use the volume, regularity and value of goods being sold via online platforms as the initial basis to initiate further enquiries as to whether you are trading or not.

So irrespective of what you are selling HMRC will need you to offer explanation as to your activities online which they will assess and make a decision whether you are trading - this could be filling a tax return - providing proof in whatever form they decide - to the extreme of enforcement visits to your home - depending on how they view the activity.

If the activity is classed as a one off occurance of selling unwanted personal items at or below their original value - you have no problem because HMRC will deem you are acting within the law but you may still be required to respond to their enquires to establish this fact.

[papso22]

They are not missing the point,  they are stating facts on a different issue to what you are posting about, I.e potential HMRC actions.

[dch2112011]

The two go hand in hand as far as HMRC are concerned - it is wrong to simply state that you are allowed to sell personal items and that you are exempt from any accountability - surely a forum relating to ebay should not be reassuring members that everything in the garden is rosy when irrespective of the goods sold the same criteria apply to all members no matter what they sell.

Members need to be aware of why they may have to file returns or answer enquires even if they are selling personal items 

It is also important to recognise that ebay criteria for trading or not trading is a seperate issue to HMRC. 

[4_bathrooms]

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@theelench wrote:

One small point and I'm happy to be corrected if I'm wrong.

You said -

"The £1000 is a Trading Allowance; i.e  you can turnover up to that amount in a year without being required to register for self-assessment."

My understanding is that, as a Trading Allowance a seller would have to register for Self Assessment and then claim the allowance against their declared turnover / profit figures ??  

A private seller can't just ignore their first £1000 of sales and, for example, sell £2000 of goods and think that HMRC will automatically reduce that by £1000.  They won't unless the Allowance is claimed ?

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Correct; the allowance can only be claimed when the seller registers for self-assessment. If the seller exceeds the threshold and registers by the following October they can either deduct their expenses or use the allowance (not both). The seller still needs records of their trading activity including for the first £1,000. However, a seller isn't required to register for self-assessment before reaching the threshold in order to be able to use the allowance in their return.

If the seller's trading income is £1,000 or less for the year they only need to keep records like invoices, receipts, bank statements etc. for "full relief" - they would be under no obligation to file a self-assessment return as no tax was due on that income.

[destructor23]

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- to the extreme of enforcement visits to your home - depending on how they view the activity.

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I've done my limit for the year.

Sold about 30 items I think, all my own stuff from around the house that I had sitting around for donkies. I guess I need to delist the rest of the rubbish that I have up, before HMRC attempt to barge my way into the house with a door batterer and a team of heavies. 

I've amassed about 750 quid - should be enough for a meal for 4 at our local Wimpy, what with our current inflation and soaring cost of living.

See you all in April 2025 for the next 30 items.

Good luck.

[dch2112011]

I read in the ebay terms that they start reporting at £1740 or thereabouts not the £1000 threshold.

Most people will hear nothing from HMRC - the criteria for action will be something along the lines of how often you sell, how many items you sell, the regularity of selling and the value of the sales. This is nothing new they have been doing this for years - the new law is with regards to the platforms having to report sellers once they reach a certain number and value of sales -  which means that those who do not self declare and should have done will be found out if selling via online platforms - 

Apparently this only applies to new accounts in 2024 and all accounts in 2025 

I do not really think anyone who is genuinely selling personal items will have much of a problem but those who sell 'personal items' continuosly over a prolonged period of time ie those who buy at car boot, charity shops and after 5 years are still claiming they are clearing the attic will have problems no matter how much they protest.

For example if you were doing a personal house clearance for probate - no problem you would have the proof and be authorised as executor to do so.

But if you are running a business doing house clearances and then selling items acquired it will be easily found out and the catalyst is probaly the criteria stated above.

Ebay's criteria for opening a business trading account will be different and is much harder to find out what it is - as members become forced over to business accounts the criteria will become more obvious.  This will potentially affect members selling genuine personal items more than HMRC will. It looks as though this will be a value and number game - I am not sure whether a member will have the right to appeal or not ? 

And yes if you are requested for information and ignore it HMRC will eventually after other avenues are exhausted or if they suspect fraud based on the information provided visit unnanounced to see whether you are living a lavish lifestyle above your declared earnings and whether they have a good chance of recovery

[destructor23]

I thought it was 30 items and/or the money threshold. So if you've sold 40 items over 12 months even at £1 an item, your account will still be reported to HMRC.

[dch2112011]

Yes you are correct - it is the threshold members are getting confused with - the £1000 threshold is different to the £1740 reporting value 

See below

Ebay Digital reporting 

For residents of the UK, eBay is legally required to report both your sales transactions and certain personal or business information to His Majesty’s Revenue and Customs (HMRC). eBay will report this information should you meet either of the following thresholds within the calendar year:

Your total sales on eBay is equal to or more than £1,740 after deducting fees and commissions or taxes
You complete 30 or more sales transactions on eBay (cancelled transactions are not included in the calculation)
Your total sales for the year are calculated based on the full amount received for your sales transactions excluding:

Shipping amounts paid to eBay
VAT collected and remitted by eBay
VAT charged on fees
Amounts deducted by eBay for fees, coupons, cancelled or deleted orders
Returns

[*vyolla*]

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@dch2112011 wrote:

Apparently this only applies to new accounts in 2024 and all accounts in 2025 

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We think that this bit on the eBay guidance page is incorrect, we're not sure where they've got that from but it's not mentioned anywhere else and, if you think about it, it doesn't really make much sense. 

[dch2112011]

HMRC will not persue every member reported to them for exceeding the reporting criteria from ebay - there will be a filtering process - working out the filtering process is difficult 

It may be that the length of time an account has been active, looking at other platforms - often traders hiding as personal sell on facebook, etsy  etc as well as ebay which would show more than a one off selling unwanted items -  it may mean a  reminder to file a return, it may be an enquiry / investigation. 

For the majority it will be either minor or non existant but for some who proclaim innocence and deny trading it will bite.

The publicity has and is designed to shake members into declaring their undeclared income -  the ones that don't put their houses in order and try and bluff it out are the ones who will be put under pressure. 

Genuine personal item sellers will have no real worries except maybe with ebay's internal policy for registering as a business - the scary bit is the number of personal item sellers that protest the new clothes - perfume - phones etc - they sell in number amongst a bit of bric a brac are unwanted purchases or gifts - 

They may believe their own stories but HMRC will not be quite so gullible - they have many avenues of investigation - and many decades experiance of investigating. 

[dch2112011]

It makes some sense in that staging reporting purely because of the size of the task and extracting the information from existing accounts may require a different computer program because of the way existing accounts are set up whereas new accounts may be set up 'ready to report'

I do not know but one for ebay to answer ?