could the new HMRC rules SEE A MASS EXODUS FROM E BAY

[reasonable-robert]

hi ...(quote)

From 1 January 2024, new UK digital sales reporting legislation requires eBay, and other UK digital marketplaces, to report a user’s sales over clearly defined thresholds to HMRC. 

For more information about UK digital sales reporting and what information will be shared with HMRC, visit our Help page.

Please also see guidance from HMRC for more information on when you may or may not need to pay tax for selling goods online.

It is important to be aware that this is not a new tax or a change to existing tax rules for people who use online marketplaces. 

Required UK digital sales reporting should only affect newly registered accounts in 2024 and all accounts in 2025 who pass either of the below calendar year sales thresholds on eBay: 

• Total sales on eBay is equal to or more than €2,000 (approximately £1,740) after deducting fees and commissions or taxes
• 30 or more sales transactions are completed on eBay (cancelled transactions are not included in the calculation)
• Starting from January 2025, the prior calendar year's information will be reported to HMRC each January and a copy of the reported data will be provided to sellers. We recommend that you consult HMRC or a tax advisor if you have any questions about your tax obligations. 

In order to pay tax on the goods or services you sell online, you either have to be trading or making a capital gain.

If you are just selling some unwanted possessions that have been lying around your home, such as the contents of a loft or garage, it is unlikely that you will have to pay income tax. If you sell possessions for more than you paid for them you may have to pay capital gains tax, but only if you exceed your annual allowance for such gains (currently £6,000). For more information on capital gains tax on personal possessions, see guidance from HMRC.

If you buy goods for resale, or make goods with the intention of selling them for a profit, then you are likely to be trading and will have to pay tax on your profits.

However, if your total income from trading or providing services online was less than £1,000 (before deducting expenses) in any tax year, you would not be required to inform HMRC nor pay any tax on the profits (this is due to the Trading and Miscellaneous Income Allowance). .......(unquote)

so unless you,re a freind of the tories, non dom, a member of the royal family or own a big business then the tax man will be after you.

the fall out as many people have said will be sellers looking elsewhere to sell.

facebook could only comply if you sell on the marketplace as the local sites are independantly run by individuals acting as admins so they would have to get every site to report sellers over a certain threshold which couldnt realisticly be done.

meanwhile back at e bay could this see a mass drop in members, sales and sellers both business and private walking away from e bay as 30 transactions in a year is easily achieveable in just one month.

it looks as if e bay could finally morph into the rival shopping destination to amazon its desperate to become and before the B.S clap their hands and cheer remember that when people walk away theres only those who are looking for certain items that you may sell left.

lots of competetitors selling the same thing not just here but on amazon and other sites and the chinese sellers....call it reality.

now lets have a sensible discussion without silly comments please.     

[fireofthephoenix]

I do see this affecting collectors. I am a private seller who has been selling off my own record and media collection. I did speak with HMRC about this and was told that because of being a private seller and how much I've sold, I should not have a problem with the eBay sales affecting my tax but to check back with them when I complete my next tax return because I'll have final sale figures.

I have been registered as self-employed for a few years in a non-related sector and complete tax self-assesments so I am already in the HMRC system so they wouldn't react to anything eBay sent them about me, just wait for my self-assesment but I would suspect others may get unexpected letters explaining that they may have to register for self-assesment and pay tax in the future

[signs_and_vintage]

I would have personally said nothing, you have or will be doing, nothing wrong but now you're potentially on their radar.

[fireofthephoenix]

I'm actually suprised that eBay would run seprate validations for NI and UTR based on account type rather than telling people to register with HMRC and obtain a UTR to continue recieving payments once they hit a certain sales level regardless of how your account is set up. 

Other large sites that process payouts require you to do this and don't mess around with NI etc

[papso22]

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@fireofthephoenix wrote:

I'm actually suprised that eBay would run seprate validations for NI and UTR based on account type rather than telling people to register with HMRC and obtain a UTR to continue recieving payments once they hit a certain sales level regardless of how your account is set up. 

Other large sites that process payouts require you to do this and don't mess around with NI etc

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But a high volume private seller doesn't have to register with HMRC and shouldn't have a UTR for those private sales.

The other sites seem to be taking a shortcut and abusing the process.

[*knight-rider*]

'Those who will stop selling will be those selling off their own collections'

It won't stop me because i'm doing nothing wrong!

At one point, i had over 500 items listed, which is now down to around 350, which is the whole of one collection and a thinning out of a couple of others.

So, as i,ve said before about this issue, if your doing nothing wrong, you have nothing to worry about, but i look on here every single day at some point and at various different things and i can tell you one thing, there are alot of so called private sellers going to be in alot of trouble next year 🙄

[signs_and_vintage]

...or not as these clever schemes usually backfire and carpet bomb the innocent whilst the guilty slip off by overnight fishing boat, so to speak.

Heard it all before where I work, 'using the new computer to allocate resources, you'll never have to work overtime again', 'our new system means 99% of annual leave requests will be honoured first time's, all b/s. Meanwhile people learn to manipulate the system...

I've got a ton of stuff for sale myself but all things I've foolishly wasted my money on over the years, camping gear we never needed or used for example, adds up to £££s but all bought using taxed income.

[theelench]

I'm a trusting sort of guy and I'll happily accept your word that you're "doing nothing wrong".  But it won't be the likes of me that people selling their collections will have to convince.  It will be suspicious Tax Inspectors who, if they've been in the job for years, may have convinced themselves that everyone who says "I've done nothing wrong" is a lying, tax evading criminal.

If your honesty is questioned by a cynical bureaucrat the real question will be:-   Can you prove, to their satisfaction, your honesty?

THAT is what will be worrying a great many entirely innocent collectors, particularly those who know little about HMRC except for their reputation for having a dogged determination to extract money from as many people as possible and a willingness to go to (sometimes) extreme lengths to do so.

They will be thinking about how few of their treasures that they have receipts for.

How many that they've had for so long that they don't remember when exactly they bought them.

How long was it that they owned those 31 items they sold last year, where did they get them and how much did they pay.

The next thing that might cross their mind is:-   Do I really want to keep a set of books, just in case HMRC might question me at some time in the years to come about something I bought on ebay in 2020 and expect me to have a water-tight explanation as to why I sold it again in 2024, including item number, number of times it was re-listed and the selling price.

You might be able to provide HMRC with all they want and prove you're not doing anything wrong, but I can't and neither can most other collectors.

In fact, if I was a cynical Tax Inspector, to find a so well organised 'collector' who had run a decades long 'collection' along such business-like lines would immediately arouse my suspicions as to what was really going-on in that case.

[signs_and_vintage]

We don't have a combative legal system so it will be for HMRC to prove you didn't use your hard earned. Obviously if you have a full time, reasonably paid job and can show reasonable disposable income (you probably WILL have old mortgage statements, online bills etc) the balance easily falls in your favour.

Also the sort of old fashioned 'tax inspectors' you imagine went out 20 plus years ago.

[annkilner]

The only people affected will be people trading illegally. People selling their own possessions will not be affected. You only pay tax on profit, not turnover. 

[signs_and_vintage]

We know that, unfortunately there IS a valid point that as the simple release of effectively turnover figures to HMRC is all that's available to them, speculation and supposition could run riot.

[kempseykate]

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@annkilner wrote:

The only people affected will be people trading illegally. People selling their own possessions will not be affected. You only pay tax on profit, not turnover. 

---

Agree that's how it should work, but as someone getting rid of  2 lifetimes (myself & OH) of stuff, plus the stuff our daughter no longer wants, and, just recently added to the mix, a lifetimes worth of stuff from my late brother in law, I am fully aware that HMRC might view me as a trader and decide I owe them so much tax.

Basically their word trumps mine. I can't prove the annuals we have sold belonged to my OH or one of his brothers, other than the fact they have their names in. I can't prove that we paid silly money in the 1990s to grow a ceramic collection, which is now only worth a very small fraction that we paid for it.  We didn't buy it as investment (fortunately!), we bought it because we liked a few pieces, then got caught up in the thrill of chase to add more pieces. But as I say, I have no proof of that.

So, even as someone selling their own stuff, I am a bit uneasy. I'm carrying on, and will see how it goes.  If they do come down on me, I will have little choice but to pay up ☹️, and everything else that's left will go to charity shop/skip.

[lucy_farmer]

This is me exactly Kate 🙁 My husband has hoarded piles of stuff all his life .

His *hobbies* are much the same as his self-employed way of earning a living (he's a 'techie'), so separating those out is a right headache.

And his father died and his mother went into a dementia home.

Then his sister died.

Then my husband's cousin died.

My husband cannot bring himself to throw things away (I think hoarding runs in the family) and even *I* think landfills are full enough.

And no, none of this stuff has receipts (from last year back to 50 years ago!), why would it?  If you bought something to use/have/look at, even if it's something that would have a guarentee period, why would you keep a reciept for years once that period has run out?

(The charity shops around here already tell me they don't want more stuff that *isn't* clothes. )

[signs_and_vintage]

Again do not overthink this, both of you will have direct or indirect proof that you have inherited estates / and/or liabilities from long term care situations. And again, if you have FT PAYE income it's more of an argument you somehow have some secret account to take e-payments from eBay then somehow launder the proceeds only to buy more.

[*knight-rider*]

`I'm a trusting sort of guy and I'll happily accept your word that you're "doing nothing wrong". But it won't be the likes of me that people selling their collections will have to convince. It will be suspicious Tax Inspectors who, if they've been in the job for years, may have convinced themselves that everyone who says "I've done nothing wrong" is a lying, tax evading criminal.`

And that`s fair enough, because i actually get where your coming from 😉

i bought something on here last week and in the description, the seller stated he was `thinning out his collection`, which got me interested, so i looked at his other listings. However, whilst looking at them, i couldn`t help thinking, `whats the collection`, because all i could see was pages and pages of bric-o-brac that looked like it came from a car-boot, so perhaps the interpretation of `collection` is up for debate.

As far as my own collections go, that`s exactly what the are, one is a music collection, of which every single piece has been purchased on Ebay and the one i`m thinning out, is a toy collection from the 60`s, again, every single piece purchased off here, so i can prove every purchase!

[theelench]

Please believe me when I say I don't doubt what you say and IMO you're fortunate to be in that position.  I'm slightly less fortunate because although I (still) have several hundred pieces of glass to dispose of, they are (mostly) from one period and can reasonably be called a "collection" (I hope). 

But what about (for example)  @lucy_farmer  & @kempseykate,  inheritors of multiple collections from various departed relatives.  Could not their selling patterns look very similar to the 'collector' you bought from.  We all have "concerns" or feel "uneasy" that our past and / or future selling will be viewed by HMRC as Trading.  There must be a great many others on ebay and other sites in the same position and with the same unease.

That's because, for the first time selling personal possessions will be scrutinised by HMRC.  Although it's true to say taxation hasn't changed, that ebay's reporting hasn't changed (except that it's become compulsory rather than voluntary), but the goal-posts have most definitely been moved.   The thresholds have been set at the level they have been and if any sales are above them, HMRC will be looking to tax, if they can (IMO).   

As kate says "Basically their word trumps mine", with HMRC it has always been the case that effectively "Innocent 'till proven guilty" does not apply.  It's always been for the accused to prove they do not owe whatever HMRC demands from them.  Usually by presenting receipts to disprove there was any profit, or the Badges of Trade to prove "pride in ownership" etc.

I'm afraid I don't accept that 'concerns' about where this is leading is "over thinking" or looking on the darker side un-necessarily.  We're living in times where (without being too political) both main parties are committed to frozen tax thresholds and dragging as many pensioners and low paid wage earners as possible into the tax net.  A.I gives them un-unprecedented technology for analysing vast amounts of data on private sales.   IMO their sights are also set on taxing sales of personal possessions (over 30 items / £1700 p.a ??)  and this is only the beginning.

[reasonable-robert]

many thanks to all my EBAY collegues for your contributions to this thread.....😁

[misterstomp]

you wait just till jan 2025 when they make all private sellers who make over £1000 worth of sales take up business status or leave ebay forth with ultimatum inline with amazon. I have it on good authority that its happening.

[signs_and_vintage]

Not quite sure if they will be forced to be a full 'business' seller when they are in fact no such thing, now, what might happen of course is that private sellers over £1000 start to acrue fees identical to business sellers, yes.

[vintique*violet]

We have a personal tax allowance of £12570 per annum. 

 anda  trading allowance of £1000.

This is tax free allowance.

1. Selling secondhand items online

Jobs that probably won’t generate tax bills include, say, money made at car boot sales and selling your old items online. These transactions are unlikely to produce a big income. They therefore won’t push you over the £1,000 annual tax-free trading allowance.

Tax-free allowance: £1,000, or £12,570 if you don’t have a main job.

Tax payable on: Earnings over £1,000, providing you are above the personal allowance. The tax rate is subject to your income tax band.

If you make more than £1,000 a year in revenue, you’ll need to declare this – along with your profits – to HMRC in January by filing a self-assessment tax return. If you’re registered as a sole trader or a business, and you declare your costs and show your profits, only your profits will be liable for the 20% tax.

Where does the £1000 trader come from , how is it calculated? Where is the line drawn by just offloading some items you do not want anymore to becoming a business?  £1001 as Grannies ring fetched far more than you thought? 

What if your income is less than the tax free allowance and your " trader" allowance together?  

If you do not work, eBay is a hobby or whatever other reason etc etc 

Smacks of cannot buy or sell without.... xyz! 

[*vyolla*]

The £1,000 Trading Allowance is an allowance for small business sellers (hence the name).

If a private seller lists and sells a ring that is their own property, gifted to them by their grandmother, and receives £1,001 they don't need to complete a tax return.