The Taxman Cometh!

[Chris CrewParticipant @chriscrew66644]

Over the course of this year I have been selling a few workshop items, which would never have been used, mostly on a well-known online auction site. The latest item went this morning and this triggered an unexpected email from the auction site stating that I had reached total sales of £1740 (or 30 items within a calendar) and that because of digital sales legislation they were legally obliged to inform HMRC of this and are requesting my national insurance number.

“We’re getting in touch to let you know about the UK digital sales reporting law. This law requires marketplaces like eBay to collect and report seller information if you meet one of these thresholds: 30 or more sales, or sales exceeding £1740 in a calendar year.”

Although not explicitly stated, the implication is that if no NI number is supplied future sales on this site may be affected. There is a further note in the email which states:

“Your tax obligations haven’t changed. According to HMRC, if you’re selling a few unwanted personal items, like those stored in a loft or garage, it’s unlikely that you’ll need to pay tax.”

This is makes things a little ambiguous as far as the self-assessment tax return is concerned. Do I now declare the sales as income and hope that HMRC doesn’t tax it or just wait to see if they send me a tax bill? Receiving the email has taken me not a little by surprise.

[David JuppParticipant @davidjupp51506]

See https://www.gov.uk/guidance/selling-goods-or-services-on-a-digital-platform

which may (or may not) help.

[howardbParticipant @howardb]

It all hangs on whether you made a profit by selling the items, and whether they are classed as “personal items” it seems.

This is an online checker

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

My advice is to avoid having to fill in a self-assessment tax return even once as then HMRC will assume that you are a trader, and keep reminding you annually to send one in under the threat of a penalty if you don’t.

[Chris CrewParticipant @chriscrew66644]

“My advice is to avoid having to fill in a self-assessment tax return even once as then HMRC will assume that you are a trader, and keep reminding you annually to send one in under the threat of a penalty if you don’t.”

Whilst I have met people who say they have never filled in a tax return in their entire life, from the year that I started work at the age of 15 I have had to complete one every single year. Why I was singled out for this signal honour, I have no idea, because until quite late in life my income was all earned with tax and NI deducted at source by my employer. However, being one of the more fortunate ‘baby boomer’ pensioners with a state pension, an occupational pension and some investment income, plus being registered as a self-employed sole trader for the last few years of my working life I am still obliged to complete a tax return. How some people avoided this chore I have no idea.

[jimmy bParticipant @jimmyb]

Ebay doesn’t seem to bother if you have multiple accounts……

 

Jimb

[Robert Atkinson 2Participant @robertatkinson2]

Ebay does not allow you to have multiple accounts.

[Robert Atkinson 2]

On Robert Atkinson 2 Said:

Ebay does not allow you to have multiple accounts.

I’m not sure who you mean by “you”, Robert, but I’m aware of many people who have multiple accounts in concurrent use.

[Richard SimpsonParticipant @richardsimpson88330]

I decided to sell some old unwanted ‘OO’ gauge coaches recently so put them on Ebay.  I haven’t sold on there for a few years as I got my fingers burned by a bad buyer last time so vowed not to do it again.  Anyway sold the coaches so tried to get my money.

It seems that you now have to supply Ebay with the details of a bank account with your authority to allow them to take funds from it.  The justification being that should you not make any payments for any purchases they have the right to take any arrears from that account.  Even if there are no funds in the account your authority allows Ebay to take the account into the red.  They even have the audacity to test that they can remove funds from the account by paying in a penny and then removing it again.  If they are unable to remove the penny then they will withhold your funds from any sale so you can only us those funds for future purchases.  It eventually took me two weeks to receive my own money that Ebay were holding on to.  As soon as I received the proceeds of the sale I closed the account again.  Apart from Direct Debits I will never give anyone the authority to remove funds from any of my accounts without my knowledge.

Needless to say I will never sell on Ebay again.

[JasonBModerator @jasonb]

Though I suppose it works both ways, as buyers we all like to know that we could get our money back if there is a dispute which is where the funds will come from.

[Bill Phinn]

On Bill Phinn Said:

On Robert Atkinson 2 Said:

Ebay does not allow you to have multiple accounts.

I’m not sure who you mean by “you”, Robert, but I’m aware of many people who have multiple accounts in concurrent use.

The law does not allow murder, but I’m aware of many murderers!

 

 

[Chris Crew]

On Chris Crew Said:

“My advice is to avoid having to fill in a self-assessment tax return even once as then HMRC will assume that you are a trader, and keep reminding you annually to send one in under the threat of a penalty if you don’t.”

Whilst I have met people who say they have never filled in a tax return in their entire life, from the year that I started work at the age of 15 I have had to complete one every single year. Why I was singled out for this signal honour, I have no idea, because until quite late in life my income was all earned with tax and NI deducted at source by my employer. However, being one of the more fortunate ‘baby boomer’ pensioners with a state pension, an occupational pension and some investment income, plus being registered as a self-employed sole trader for the last few years of my working life I am still obliged to complete a tax return. How some people avoided this chore I have no idea.

I too had been S/E sole trader for 20 years before retiring and moving to France.

Despite filling in forms to prove that we are taxed in France as a couple and having our local french tax office stamp and sign them off, the self-assessment forms were still demanded.

I got so sick of it I raised a complaint with HMRC about their own procedures, which finally got attention and just received a tax code notice which said “no tax” or something equally dismissive, which took 6 months.

That’s why I advised not to get involved with HMRC if possible.

[Robert Atkinson 2]

On Robert Atkinson 2 Said:

Ebay does not allow you to have multiple accounts.

Yes they do. I have 3

 

Jimb

[Martin of WickParticipant @martinofwick]

HMRC will be looking for traders so volume x revenue. However the bar is low, I have heard of individuals getting an ‘assessment’ for just over 3k – what is more, HMRC take no prisoners, shoot first, ask questions later. They will see the headline amount and assess it all as income, all of it, unless you can prove otherwise.

So think on’t when you flog off the contents of your workshop, but of course you will all be OK because you have kept every receipt for every item going back 50 years, no?

For high value items, they don’t need volume and  will assess as capital gains.

And if you are worried about E Bay dunning your bank account, then worry more, because from 2026 HMRC will be able to help themselves to anything they think you owe, up to you to prove them wrong of course.

See how beneficial AI is becoming!

 

 

 

 

[JasonB]

On JasonB Said:

Though I suppose it works both ways, as buyers we all like to know that we could get our money back if there is a dispute which is where the funds will come from.

Which is fine for buyers and precisely why I will never use them to sell again.

[SillyOldDuffer]

On SillyOldDuffer Said:

On Bill Phinn Said:

On Robert Atkinson 2 Said:

Ebay does not allow you to have multiple accounts.

I’m not sure who you mean by “you”, Robert, but I’m aware of many people who have multiple accounts in concurrent use.

The law does not allow murder, but I’m aware of many murderers!

 

 

The difference being that murder is a criminal offence, enforced by robust policing, and ebay not only doesn’t disallow having multiple accounts but actively permits it.

https://www.ebay.co.uk/help/policies/identity-policies/multiple-accounts-policy?id=4232

[JasonBModerator @jasonb]

It may actively permit more than one but in the context of this thread what Robert says may be true as tax rules are part of their policy

Are there circumstances when creating another account isn’t allowed?
Registering new accounts to avoid buying and selling restrictions or limits, or other policy consequences, is not allowed on eBay.

[Mark RandParticipant @markrand96270]

So why, if EBay are reporting peoples details to HMRC when they sell more than 30 items or £1740 in a year, do they never uphold reports of sellers who are businesses, selling as businesses, but registered as private sellers (thereby avoiding the distance selling regulations for buy-it-now items)?

Gets me somewhat livid…

[Robert Atkinson 2Participant @robertatkinson2]

I stand corrected.
I don’t know when that changed. Not only was it banned they actively detected use of mor than one account from a IP address. They also said you could not have one account for business and one for personal.
However, as SOD has already pointed out you are not to use this to circumvent policy. Doing it to avoid the tax notification almost certainly counts as tax evasion.

I don’t know why they don’t stop business sellers using private accounts. Since they “updated” the reporting process you don’t even have the option of reporting fraudulent e.g. scam listings.
Mind you when you could, and did they never acknowedged you were right the listing just disappeared. The cynic in says this is becuase they didn’t want to admit there was fraud.

Robert.

[Chris CrewParticipant @chriscrew66644]

Howardb,

It seems you have conjoined posts by two separate contributors, so just for the record Chris Crew did not say:

“My advice is to avoid having to fill in a self-assessment tax return even once as then HMRC will assume that you are a trader, and keep reminding you annually to send one in under the threat of a penalty if you don’t.”

Tax is obviously a very personal thing and sometimes interaction with HMRC is essential when claiming tax relief on legitimate business expenses that are not fully reimbursed by the employer. I recall when I was employed a ‘company rate’ was paid for mileage incurred when on business in a private car which was less than the then Inland Revenue allowed. I think at the time the company paid 45P/mile whilst the IR allowed 65P/mile so you could claim tax relief on the difference and this could be several hundred pounds over the course of the tax year. This advice was freely available to every itinerant employee but some refused point blank to apply for a rebate and others almost turned white at the mere mention of the IR. They must have been owed hundreds, if not thousands, over the years!

[Bill Phinn]

On Bill Phinn Said:

On SillyOldDuffer Said:

On Bill Phinn Said:

On Robert Atkinson 2 Said:

Ebay does not allow you to have multiple accounts.

I’m not sure who you mean by “you”, Robert, but I’m aware of many people who have multiple accounts in concurrent use.

The law does not allow murder, but I’m aware of many murderers!

 

 

The difference being that murder is a criminal offence, enforced by robust policing, and ebay not only doesn’t disallow having multiple accounts but actively permits it.

https://www.ebay.co.uk/help/policies/identity-policies/multiple-accounts-policy?id=4232

The difference is too subtle for me!  Perhaps because ebay’s rule is “we allow more than one account unless it breaks some other rule”.  Inconsistent because it’s not black and white.

My point is that there are many examples where rules are widely ignored.

Last week I saw an ambulance and a police car parked on a double line.   Being drunk in a public place is an offence under the licensing act of 1872, yet our town centres are full of anti-social drunks at going home time.  People often impersonate police officers at fancy dress parties, even though it’s an offence.  And as for riding bikes on the pavement…

Dave

 

 

[duncan webster 1Participant @duncanwebster1]

<p style=”text-align: left;”>The uk tax system is ridiculously complicated. When I had a one man limited company I unwisely tried to do the accounts myself to save the £800 it cost to employ an accountant. Didn’t understand one of the questions, so ring them up. Can you explain this – no – does that mean you can’t or you won’t – I can’t- so you don’t understand it – no – so why am I filling it in? – so your shareholders..   – hang on, I am my shareholders, where do you get this  rubbish from? – we were advised by a firm of accountants. Talk about jobs for the boys, the whole thing needs to be ripped up and start again, but politicians aren’t that bright, and lots of bean counters would lose their jobs, so I’m not holding my breath</p>

[Adrian R2Participant @adrianr2]

Getting back to the original point the main thing you should do when selling online is keep records and satisfy yourself that you are not making a trading profit, then carry on as before. If the items are personal items then no problem, if you are buying stuff from boot sales and listing them online and are fortunate/shrewd enough to make money then cough up as it keeps the country running.

I’ve done DIY self assessment online since it was introduced, so far have only been queried once after a property transaction and as I was able to produce the records they wanted then the matter was closed quickly and no further tax was due.

I am a bit worried by HMRC automation but only as they don’t seem to be very good at it e.g. recent child benefit stoppages after taking holidays, but if this happens then having the records will at least give you a leg to stand on.

 

[David George 1Participant @davidgeorge1]

I have to earn less than £1000.00 per year from sales on Ebay, payments for writing articles for this magazine before extra tax is payable. I rang the tax office and the person new the balance of my various bank and savings accounts before I told him and he told me they are already giving this detail to them by law and he agreed I have a limit which I can earn of £1000.00 before tax any any sales thru Ebay etc will  be notified to them.

David

[JasonBModerator @jasonb]

As Adrian says the best thing is to keep records so that if you do get investigated you have an answer.

Having been self employed for 30yrs I have software to do it but a simple spread sheet will likely do for small amounts. I also have a business bank account which simplifies things as that is used for anything likely to be taxable.

Although you may get flagged for sales of over £1000 it does not have to mean you will get taxed. I used an accountant upto a few years ago before I started easing off and now do it myself online. When I mentioned to him that I had started writing for the magazine his first comment was “are there any expenses”. So if selling on ebay or recieving money from other sources keep a record.

In a case like David’s above where he may be selling castings on ebay then the cost of those castings can be set against the total sales so maybe only £500 is taxable if he had applied a 100% mark up. Even on magazine articles I may have had to buy materials or tooling and so long as it is kept to reasonable amounts can be claimed against the income therfore reducing the taxable amount. But you will need to show those costs so keep invoices and a record.

[Martin King 2Participant @martinking2]

Hi All,

Hopefully this might prove informative and perhaps helpful? Warning, longish post!

A series of perhaps disjointed and unconnected remarks which I write as they come into my head..

I have been self employed for most of my adult life and over 40 years ago got into trouble with the IR as I had been working in the Caribbean as a charter yacht captain and when I returned neglected to mention the income from renting out my flat in London for 4 years!.. This took a fair bit of sorting out and was expensive!

I vowed then to never again get in that kind of mess.

Working for 30 years in the film industry as a freelance technician was straight forward as I always had to invoice each job and could claim for equipment, travel and other expenses. I did however start using an accountant which saved a lot of head aches. I used Quickbooks from the start, giving him the file to sort out.

The last film work I did was over 20 years ago on the 1st Harry Potter 2nd Unit for nearly a year.

We then started our little EBay foray and for the 1st year or so did so on a “personal” basis until my accountant put me straight.

We then registered as a business user and have remained so ever since. Feedback now is 22,000 and only about 60% of buyers leave it so we have sold a lot.

For us the main attraction is the joy and fun of “The Hunt” for interesting items which means we go to a lot of car boots, flea markets etc. We also get a lot from auctions but trying to do less of this if we can.

Recently we have noticed several clear instances of seeing cars at boot sales with people taking notes and photos of buyers and sellers. Apparently ( and I cannot substantiate this) they start with the car reg, check for tax & insurance, EBay feedback, whether the guy carrying an anvil back to his car is claiming for a bad back et etc. They then note tat he has a feedback 0f about 2500 and assume that he is NOT just clearing out his loft..

The main irritations of EBay are the lack of support for business sellers and the scandalous 10% that they take from all shipping charges. In our case we do about £25k pa at our local Post Office so they cop £2,5k for doing sod all.

They do nothing to stop the buyer who returns an item having swapped out the broken or missing part for a similar item that he has claiming the listing item is defective. We get lots of this! Usually we manage to get it thrown out by customer service.

This was to put an end to a private seller listing an item for 99p (free listing!) and charging £75 for postage!

It has coincidentally turned out to be a massive earner for eBay.

We do pass this on to our buyers and let them know why; we do not get that many complaints but some.

At any car boot or flea market it is easy to spot the buyers who are looking, like us, for items to resell. There are people, again like us, who buy within the “specialty” that they operate in on EB whether it is clothing, toiletries or any number of other things. Do it long enough and you soon see the same faces over and over.

The overall “used item” marketplaces make a massive black economy which is only going to draw more and more attention fro HMRC and probably rightly so IMHO.

Just my 2 cents worth….

Cheers, Martin

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