another reason not to use ebay to sell stuff then. Its completely unforceable for 'normal' people who are just moving on second hand stuff.
i suspect they are not really interested in those who genuinely clear out a garage or sell off the remnants of a hobby, but those who are patently selling off stuff they have bought in an attempt to make a profit - those using it as a side hustle right up to businesses using eBay as another route to market. it's probably a bit like the capital gains regime where irregular disposal of items such a car is of little interest (even at a profit), but a pattern of regularly buying and selling assets is obviously trading.
That’s why it seems bonkers that they’re now using what meagre resources they have on chasing people selling stuff on eBay? How much is that going to bring in for the exchequer? I’m guessing pretty much nothing.
The threat alone will bring in some additional revenue. No additional work needed.
Well, If you do, them I’m truly screwed – 121 items – £14.7k….oops.
£14.7k in sales is trading in my book.
Definitely going to affect those with a ‘side hustle’ – my niece sells hand made items via etsy and even calls it ‘her little business’, but I’m darn well sure she’s claiming benefits and not declaring the business income.
So arguably she'll be undercutting those who do do it properly then and taking money out of the system as well.
If our taxes were spent wisely I'd be outraged, but they're not. So, meh!
Whatever happens - it'll be bonanza time for car-boot sales. Loads of untraceable cash payments for the win! 🙂
e.g. If I stick 12 decent pics in a calendar on Etsy, does that then mean my camera gear is a “business”. In which case can I get all that equipment offset against my PAYE?
Your camera kit can be offset against the business profits from the calendar business, not your PAYE.
Wonder how this applies to cars. Admittedly a small group but the car I bought for 10k 15 years ago is now worth £20k. If I sold it would there be tax due on the 10k uplift (not profit due to cost of ownership)?
Cars, however, are exempt from Capital Gains Tax, as they are considered a 'wasted asset'. This means they are viewed by HMRC as having a “predictable life which does not exceed 50 years”, while also being “likely to become less valuable” over time.
Your camera kit can be offset against the business profits from the calendar business, not your PAYE.
What if my PAYE job is as a cameraman?
£14.7k in sales is trading in my book.
And yet you've made that judgement based on sweet FA knowledge over what was sold.
if however you were regularly buying and selling cars you are then deemed to be in business and that CGT issue becomes a trading profit and will be of interest. if you have had just the one or two cars (and your period of ownership is as extended as you state) then you've the taxman should view it as you've just been lucky and not be bothered.
Most people don’t have £14.7k’s worth of old stuff lying around.
Which was my point. As £14.7K seems a lot then HRMC could go after it. Evidencing that all 121 items sold were indeed personal items previously purchased (maybe many years ago) and then sold at a loss will be a lot of fun.
Will the burden be on me to prove that it is not profit?
Always.
Which was my point. As £14.7K seems a lot then HRMC could go after it. Evidencing that all 121 items sold were indeed personal items previously purchased (maybe many years ago) and then sold at a loss will be a lot of fun.
Precisely:
My 2018 Stache was broken down and sold for £3.3k, my 2016 Yeti was broken down and sold for £2.9k. Two additional wheelsets for the two bikes were sold for £1.8k, I sold some old action figures I'd bought in my teens and that had been sitting in my parents loft £1.1k. I sold an iPad pro and my less than 6m old laptop as I'd been given one by work £2.7k. Kids bikes *2 (£1.05k), Xbox, PS4, general stuff, etc. Everything was sold at a loss and heck, most of it was bought SH to begin with. How do you prove it?
4 bikes were turned into 4 bikes. 2 wheelsets were turned into 3 wheelsets, the consoles made A single console XBoxX. The laptop and ipad money went into paying off the debt I'd incurred in buying the laptop in the first place.
Most people don’t have £14.7k’s worth of old stuff lying around.
Many of us with multiple bikes would easily get to many thousand if we're selling stuff to buy new stuff.
All sounds like stuff where you can identify the original purchase easily enough (given that many will have email receipts I suspect)... quick, short easy chat with the HRMC there... not that they'll bother... that still doesn't look like a business (yes, some micro businesses will turn over that kind on amount on ebay, but a quick look at what is sold, rather than than total value, would mark then out as traders... your history would not).
This whole thing sounds about as well-thought-through, practical and workable as their Rwanda policy
Yep, you've still the receipts for those action figures you bought in your teens haven't you?
I am very bad at keeping receipts and I tend to buy complete used bikes and then over a year change almost everything so would not have receipts for each part and explaining that the sold item was from complete bike etc,.
Ultimately it would be difficult to explain/prove so it would end up on my tax bill. I am typically much lower the £14K in a year and have only sold ~£50K in total on eBay in 20 years so should be under the radar.
Does the £1k include any money made from savings interest?
Or is it a separate £1k allowance.
Many of us with multiple bikes would easily get to many thousand if we’re selling stuff to buy new stuff.
I think you are proving their point there.
Its going to depend on implementation but overall seems a reasonable starting point.
In theory these rules always applied but as the information wasnt shared HMRC couldnt enforce it.
Now with the information sharing they can.
Sadly it will be down to how its implemented but allowing them to have a quick look and go "hmmmm" this account has had 10000 sales and made this much lets have a quick look to see whether it looks a bit businessy seems to make sense to me.
Hopefully it will get some of those dropshipper idiots who clog up all the searches.
I have a sense that people are just looking for chances to moan at HMRC (usually fair game TBH) when the reality is that this is only a slightly changed emphasis.
HMRC has always had the ability to request this info from UK companies, but because many of the actual websites are overseas, that isn't possible for all. Now there's a global OECD initiative to share the data, and further to make it that rather than 'on request' they're being asked to flag volume and value users. That's not the same as 'everyone over £1000' - that's something that has been jumped on as being assumed to be the threshold that will trigger reporting. IDK what the threshold is or will be, it'll come in in a year's time and I suspect will be quite a bit higher if they want to be able to follow them up. But maybe they will flag all with substantial turnover and transactions with a 'reminder' that they need to ensure they're under the threshold OR including it on SA, and then focus at a second level. I don't see any issue with that?
The £1000 is a true threshold for reporting though..... anyone *making* more than £1000 should be declaring it anyway, via normal SA tax. If you aren't then you are not declaring earnings truthfully and might not be paying the right tax. That's not HMRC being draconian, it's a fact, and responsibility lies on the individual to support their tax return numbers. Doesn't mean that above £1000 in earnings you will pay tax, you'll still have your own allowance, etc. The £1000 is available to all 'free' for hobby selling, no matter how much you make in your main job or not (which you should be paying proper tax on anyway)
Meh predicted this years ago on this very forum. All the tax clamp downs (trades, small businesses etc) will be on the little people while the American corporations crack on business as usual. What a shocker eh!
They always punch down and start at bottom, while trivialising the amounts of money when it's rich people and making a massive deal over much smaller amounts when it's dirty little plebs at it.
IDK what the threshold is or will be, it’ll come in in a year’s time and I suspect will be quite a bit higher if they want to be able to follow them up
BBC article lists one of the websites saying they only need to report those with greater than 30 transactions a year or whatever 2000 dollars will exchange to so increases it a fair amount to begin with.
Then I would guess HMRC might start looking with interest at anyone with triple figure transactions or five figure sales.
The 1k has nothing to do with savings interest, it's a threshold before any trading is considered enough of a business rather than hobby that it's worth taxing.
Apparently it's also a threshold for turnover rather than profit, which I had forgotten. But the tax paid is only on the profit. People selling 14k of bike parts per year probably need to keep proper records but may not actually end up paying much tax.
@trailseeker, bank interest is seperate, and for paye employees your tax code will be amended.
High rate taxpayers will pay income tax @ 40% on anything over £500
Basic rate 20% taxpayers will pay on interest over £1k.
note personal income tax levels are frozen for the next 5 years and current allowances are diminishing..
capital gains tax [£6k, £3k next tax year] // dividend income [£1k, £500 next tax year] // savings interest have all lowered in recent years
Vinted is going to be fun to fill out any paperwork, I've just checked what you can download, i'm still well with £1k, but it seems they don't even have the item name in the downloads.
the records only contain TransactionID / Date / £value
sold lots of old mtb gear and a few new items, that i'd never worn. would i be expected to match up each transaction with the item and the cost on new stuff i've sold.
Think people here are confusing what qualifies for income tax eg Trading parts for profit & what is Capital gains eg Selling off a bike collection.
HMRC Rules are pretty simple to follow on Trading. Register if Turnover > than £1k. Complete self assessment. Income tax on any net profit depending on whether allowance is used up by other earnings eg PAYE, Pensions etc
When I was PAYE and just doing a bit of trading to pay for my silly expensive bike habit I didnt bother. Now I am taking a pension and doing a bit more to cover cost of living increases I have registered as a sole trader and am doing a self assessment.
I have always kept a simple spreadsheet cash book of sales & purchases so accurate self assessment pretty straight forward.
sold lots of old mtb gear and a few new items, that i’d never worn. would i be expected to match up each transaction with the item and the cost on new stuff i’ve sold.
https://www.gov.uk/simpler-income-tax-cash-basis is pretty simple
Vinted is going to be fun to fill out any paperwork, I’ve just checked what you can download, i’m still well with £1k, but it seems they don’t even have the item name in the downloads.
the records only contain TransactionID / Date / £value
sold lots of old mtb gear and a few new items, that i’d never worn. would i be expected to match up each transaction with the item and the cost on new stuff i’ve sold.
As per the multiple articles and posts on here, the reporting by these cos doesn't start until Jan 25 so they will I suspect have it all done by then.
But yes, if you have a 'small business' buying and selling bits and bobs at a level likely to interest HMRC then yes, it is on you to keep records so you can ensure you are paying the right amount of tax.
Seems fair enough to me, just need to tighten up on Amazon and Starbucks etc
Or indeed eBay who seem to be a bit averse to paying HMRC in full themselves...
thanks @theotherjonV
@cookeaa ebay will no doubt be getting a few percent kickback for implementing this scheme
i also noticed recently when buying from USA sellers ebay now add 20% VAT onto your winning bid..
Enforcing this on any kind of scale would be pretty much impossible, even before you take into account that HMRC is the most incompetent organisation in the world. Some cynics might say deliberately so.
Oi, I resemble that remark.
We do data sweeps like this at various "risk categories" all the time. It gets risk assessed, and then a few thousand letters go out, a few people own up, a few get caught, we move on.
All the time the proper experts are quietly pursuing all those big fish we like to moan about "getting away with it", and those cases can take years to reach the evidence threshold.
Before you criticise HMRC, bear in mind the government recently refused to tell the Public Accounts Committee what our resourcing requirements were to properly close the tax gap.
And while the tax gap appears huge at several billion pounds, it's about 5% of tax due. Which means that despite our problems, we do get 95% of tax owed.
... actually I've deleted that link as it seems unlikely
"Did you make >£1000 profit on it?
If yes, then yes.
If no, then no.
Seems fairly straightforward to sort out even if you do get caught in a very broad net?"
No it won't be.
"Could be a headache for people like this then having to account for time and material cost."
yes it will be
It's not as straightforward as our revenue chap insists - but then he would say that. I mean it is if you have an accountant obviously.
What it will do is drag thousands more into self assessment for basically no reason at all and for many that will be a right PITA. We've already seen this with the child benefit clawback and it caught many people out, some ending up with huge fines for incorrect self assessments which were made by accident.
Typical tory - go after the little people with a big stick whilst offering carrots (tax deals) to the real criminals. God I hate them.
If I understand correctly the £1000 allowance only applies to trading, ie, not to normal person "selling some stuff" but only to intentional profitmaking stuff. So if you, frinstance, buy a bike for yourself, don't like it, and sell it then that doesn't qualify, but if you buy a bike to sell and then sell it, it does.
Of course there's no practical way to distinguish the two but it adds to the whole general mess of the situation. My own approach is to assume it'll never be a problem for me as I'm not selling enough, but you never know, the tory way is to go after the little guy who can't afford lawyers after all.
is to go after the little guy who can’t afford lawyers after all.
Probably more a case that people with a "Wee side hustle" are less likely to be switched on to the rules
eg
https://twitter.com/DanNeidle/status/1673231274469720066
they really will only go after those setting out to trade to make a profit. if, for example, they started chasing anyone who had sold a bike they didn't get on with they are going to have to start to allow for losses too and the economics of that will go badly wrong.
If I understand correctly the £1000 allowance only applies to trading, ie, not to normal person “selling some stuff” but only to intentional profitmaking stuff.
My understanding - the £1000 is there to allow for 'hobby' businesses, etc., If it's a main business then it's all declarable. If it's a shit main business ( 😉 ) where you only make a tiny profit <£1000 then you still have to do accounts even if there's no tax payable on it. Below £1000, eg: doing a bit of side tuition or being paid for fixing someone's bike for them (all the focus seems to be on buyng / selling but there are more types of business than this) then it's tax free up to that £1000, even if your main income puts you into tax.
But even then, you could be required to provide documentation, even below that level. Unlikely given the short staff at HMRC but technically you could.
That Twitter thread is absolutely horrendous!
They really do seem to actively relish making the lives of poor people as difficult as possible
I'm still a bit unclear on what it legally means... not that it affects me at all, but it does stink of yet more poorly thought out commands from the ivory tower of westminster to pass an admin burden onto more normal people.
I mean, If I buy a shipping containers worth, of, I dunno, ballet shoes from china at £2 per unit, and flog them on ebay for £8 per unit, that's very clearly a taxable business acitivity.
I's just very unclear to me where the line is drawn (legally speaking) when you get into the nitty-gritty of it.
I’m still a bit unclear on what it legally means… not that it affects me at all, but it does stink of yet more poorly thought out commands from the ivory tower of westminster to pass an admin burden onto more normal people.
Going back to my earlier post on this. Nothing has actually changed in respect of the hobby seller. There's always* been this allowance, there's always been the requirement to keep appropriate records, there's always been the requirement to declare above this in a self assessment, and there's always been the ability of HMRC to ask UK companies to provide records to support their own investigations.
* as in these bits aren't new. IDK when they were actually brought in, don't get pedantic on always, I doubt they were in force since the dawn of taxation.
The difference is now that there an international agreement that OECD countries can ask for records from companies in other OECD countries rather than just nationally (reflecting the international set ups of online platforms) so HMRC can now ask for records from eBay, Vinted, AirBNB, etc.
The obligation on the individual was always there, it's not new. It just is harder to evade now, because HMRC can more easily check up on who should be doing returns but maybe isn't. And as said, won't affect true hobby sellers but if it 'catches' those that are actually running dropshipping or small businesses and not paying their dues, why's that bad?
you are not expecting this government to consider the details are you ?
fair few on this thread and the wider web rushing to bash HMRC seem to be quite 'detail-lite' tbf
Yes sorry, the point behind my post of that twitter thread, is that the rules are what they are. Its worth anyone selling stuff to acquaint themselves with the rules by spending a couple of hours going through the HMRC website to understand the really quite simple rules. That post shows that many don't. I personally wish I had done it sooner.
People can then decide whether the rules really apply to themselves or whether their level of activity is actually too small to bother.
+1 for Andy's post immediately above; 'ignorance of the law is no defence'.
For the vast majority of sellers on various platforms the announcement will be of zero relevance.
There is quite a market in auction houses selling pallets of customer returns from John Lewis and Amazon, amongst others which are of interest to traders
The auction house used by JL also, occasionally, list container loads which are explicitly directed at traders.
HMRC may well be active in this area but, if not, it probably won't be long before they are.
Will there be a shift in sellers moving to FB marketplace?
I posted a link to a BBC article a while back which pointed out that it's not just ebay but a range of activities including renting through Airbnb.
I suspect that if you run a YouTube channel or website, for example that generates income through ads, you'll also be expected to pay your tax if you make sufficient profit.
