but sorry it didn’t live up to your standards
What are you on about?
A cynic might say that in itself it won’t raise anything at all in revenue from additional tax, but it does open up another avenue to slap big fines on unsuspecting people, like they have done with self-employed people and self-assessments forms
HMRC are reasonable and fair in dealing with the public
No disrespect to the actual workers on this thread but they can be rather Kafkaesque in that they will only tell you not to do certain things and not explain how to remain compliant.
This is not unique to HMRC, HSE are also known to operate in this way.
I suspect this is down to poorly written legislation and lack of test cases.
well i had a spare few hours, vinted i’ve sold 75 items in 2023, totalling nearly £1k,
i’ve marked items as either new (stuff i’ve got/bought and never used/worn) versus worn by my self / used bike parts etc. i’ve then looked through my hotmail and added email screenshots of the 25 new items, i have made a grand total of £29 profit.,
can i deduct the losses on a few of these items against any profits?, ie i sold a shirt for £6 with tags still attached from bottom of my wardrobe £8 on original receipt
Potentially, if you're going to consider yourself a trader then you could.
so i’ve got to do a self assessment for £29 and pay 20%/40% tax.
what a ballache..
No, you don't. As numerous posts and posters have already pointed out.
How about an offshoring tax, then? I'd rather see some legislation to set that up.
it's not an either or choice though, is it?
I'm not suggesting it is an 'either or'. I'm suggesting the implementation of an offshoring tax (tax on profit moved offshore), which doesn't currently exist.
My thinking has been informed from a book:
TAXTOPIA by The Rebel Accountant
Actually quite an entertaining book about tax avoidance!
@finephilly I’ll check it out, nothing legally wrong with tax avoidance it’s tax evasion which is the issue .
hence why I put more in my pension, take out a c2w and buy holidays to lower my PAYE , whilst putting my savings money into ISAs to avoid capital gains and dividend tax
Some of the replies on here suggest that is not a problem and I should be doing it anyway but for ME it is a problem as digging around for say 100 original purchase receipts that match the item sold that year is nigh on impossible meaning I will just have to pay tax which I shouldn’t be paying.
if you are selling things twice a week on line, is it not an income stream you should already be reporting to HMRC and keeping the records necessary to back it up?
After reading that MSE article, I don't think it's as clear cut as some people are suggesting and if they wanted to, the change could pull in a lot of people and create a lot of admin for minimal tax gain.
I have sold quite a lot on eBay since covid, a few things trading but mostly items that i no longer need to clear the years of clutter from different hobbies.
I keep a list of the items I list that are purchased to resell.
eBay allow you to export data including the payments from eBay (ie after their fees). I regular export between dates and go through it and mark it in a spreadsheet whether each transaction was trading or not. I ensure I keep under the £1000 turnover limit.
For items that are not trading I put a small comment as to why it isn't
I haven't been asked for the information before, however I expected to be questioned at some point.
It doesn't take too long to do.
In terms of whether they believe me, when selling my own personal used items I very rarely sell more than one of the same thing.
That’s an interesting one. If you bought it 10 years ago and kept it pristine in a box then AIUI that could be considered taxable as an investment if it’s something you planned to do / regularly do. Badges of trade as above
Buying a watch as an investment is a capital gains item and would falls within the CGT regime as do antiques, jewellry etc. Trading does not apply to selling old stuff - trading is buying and selling stuff with a view to a profit - the latter point being equally as important. Indeed it is on this point that many of the later film tax deals failed - Jolyon Maugham lost those ones too.
"eBay allow you to export data including the payments from eBay"
Whereabouts is this? I can't find it anywhere
, I don’t think it’s as clear cut as some people are suggesting and if they wanted to, the change could pull in a lot of people and create a lot of admin for minimal tax gain.
This is the way.
“eBay allow you to export data including the payments from eBay”
Whereabouts is this? I can’t find it anywhere
There are two ways of getting an export from Seller Hub (if you haven't turned on seller hub, then you might not get the option.)
I am only interested in the net proceeds that ebay have paid to me (ie after their fees, not including postage).
To get that information you have to go to Performance and Sales and then choose Sales. Then select the date range and generate a report against the same period the previous year.
Then where the report is, you can then click download and it will give you a sales report. How many of each item and the value of sales
if you are selling things twice a week on line, is it not an income stream you should already be reporting to HMRC and keeping the records necessary to back it up?
Nope. Why would I be "reporting" it to the HRMC. There is absolutely no requirement to do so as I haven't made any profit from it. Think about it, how is buying something for £100 and then selling it later for £50 an income stream?
@kerley Exactly. This is the thing certain people on this thread are struggling to focus on. Just like you I sell quite a lot of kit over the year. Mainly audio, camera and watersports kit. I rarely if ever make any profit and it just helps fund the next toy. I buy well on the first place and this means my many hobbies are not as expensive as they should be, The value of stuff sold over the year can easily reach a few thousand. The thought of having to 'explain' the man maths here to anyone other than my wife does not thrill me. Self assessment is very much not the game plane here.
@paulwf have you considered having sperate eBay accounts for personal and trading?
Nope. Why would I be “reporting” it to the HRMC. There is absolutely no requirement to do so as I haven’t made any profit from it. Think about it, how is buying something for £100 and then selling it later for £50 an income stream?<br /><br />
HMRC seem to suggest you are required to tell them if your income/turnover is >£1000. You only pay the tax on the profit but are required to declare the income source. I don’t make the rules… https://www.gov.uk/government/publications/selling-online-and-paying-taxes/selling-online-and-paying-taxes-information-sheet#:~:text=However%2C%20if%20your%20total%20income,Trading%20and%20Miscellaneous%20Income%20Allowance).
If I fell in that camp I would be slightly concerned because HMRC are often a PITA about not reporting stuff even if it had no net impact on the amount due. If you should have made a self assessment (of zero) each year they can issue penalties for failing to register. They never accept “I didn’t know I had to” as a reason.
If you should have made a self assessment (of zero) each year they can issue penalties for failing to register.
How often does that happen?
How often does that happen?
When you disclose it on a public forum - I have 72 hours to report any suspicious activity or it's a disciplinary matter.
(Officially, at least)
How often does that happen?
Apparently in the 20-21 tax year 184,000 people were fined for failing to make an assessment despite not owning any tax
Quick reporting question for those in the know.
I read that HMRC will receive similar data from banks about monies passing through accounts. I've got a scheme going with four credit cards whereby I effectively use one credit card to pay off another every month, I've a method of doing that without fees but the money has to pass through my bank account to do this. This means I'm borrowing a fairly significant amount interest free which I've stuck in premium bonds.
The money-moving takes 10-15mins every month and my profit from this is my winnings on the bonds, which is obviously tax free and doesn't need declaring.
However, in total around £400k a year is going in and out of my bank account to make this work, well in excess of my annual salary every month!
I'm pretty sure this will flag something up and questions will be asked. Obviously I can prove it's legit but is there any way to head off an investigation before it happens? None of that needs to go on a tax return.
IDK the tax implications if any, but just wow! What's the catch, how do you transfer between cards without paying fees on the transfer?
How much are you making on the PB's and how long have you / can you keep going for - I assume one day they'll want the cards paid off?
Good effort! I did similar where I'd take out a card with 12 or 15 months interest free, buy premium bonds to match my spending each month and ensure I paid it off a few weeks before accruing any interest. That was a couple of decades ago but if you've a way to rotate the borrowed money between cards without fees, brilliant!
I'm making £150ish a month, £225 this month though😁obviously varies from month to month but not a bad return for the amount of time I spend doing it and zero risk. Well, unless NS&I goes bust🤷
Definitely no tax implications, I'm an accountant and understand that end of it, my profit is from a non-taxable source, but I just wondered if the large cash movements would now trigger something at HMRC and how to avoid the hassle of that.
PM me if you want to know the mechanics of it, I'll share the secret if you share the million quid when you win🤣
The MSE link from the last page is worth a read and there still seems to be some flexibility in the way it's going to be implemented.
Two things strike me though the first is that HMRC are clearly looking to automate all of this and nudge what mostly amounts to 'small fry' into doing online self assessments for relatively trifling sums (a couple of grands worth of eBaying in a year for which they'll score maybe £100 worth of CGT?), it doesn't sound like they're looking to make this a labour intensive task from their end.
The other thing I can't help wondering is can't this be incorporated into the various platforms automatically? i.e. you get an email once you've sold over £2k worth of stuff in a financial year informing you that along with platform fees, anything sold on that platform up until the end of the financial year will have an additional 10% deduction passed directly onto HMRC to keep the user compliant? They can opt out of course and do a self assessment directly, but it probably makes sense if the likes of eBay and Etsy want to thrive as I'm sure these measures will drive (profitable) users away from their platforms...
One other thing to note is they mention Air BnB, that is probably a more significant chunk of undeclared income that HMRC will be taking an interest in. There's the odd student doing a couple of cheeky grand a year with arts and crafts on Etsy, and then there's Rupert and Hermione turning over an extra £100k on their second home in Cornwall. Who do we really think is worth pursuing?
Haha! Dm incoming, happy to share a fair percentage of that big win 🤣
I was thinking the same cookeaa, except as much as they automate the flagging of potential undeclared and taxed revenue they still need to have a person pick up the case. Surely the limit they are setting of £1k gross turn over is far to low..... if they set it at 4 or 5 times that I could begin to be convinced it would generate more than it cost.
Does a human actually have to pick up a case? Surely if you plug the numbers into a self assessment form it's just processed on a server and an automated bill spat out? Humans only really need to review/audit a percentage, or cases where a user challenges the outcome.
£1k is the extant 'personal trading allowance' isn't it, it's really there to govern the fact that many people flip on their used possessions or maybe do a bit of hobby related buying and selling.
You could probably argue that the threshold needs to be reviewed and set a bit higher now as CoL and inflation has probably pushed the typical value of that sort of personal trading in the margins up a bit for most people. The fact that they've said they'll probably only really take an interest once you've hit ~£2k pa on a given platform suggests a level of pragmatism from HMRC. If it's CGT at 10%(?) on anything over £1k in a year and you managed to flog £1100 of tat on eBay are they really going to hunt you down over a tenner?
This is mostly low hanging fruit stuff for them of course, the growth in online platforms for buying and selling stuff plus a couple of years where people were trapped at home, bored and decided to supliment their incomes buy flogging unwanted stuff has probably made it a ripe hunting ground for relative "loose change" from an unpaid tax perspective.
All still a drop in the ocean compared to what the likes of Amazon, Google and indeed eBay probably wriggle out of paying HMRC though, the difference being the time and effort required to extract revenue of course. HMRC tell a PAYE mug like me I owe an extra hundred quid, I'll jump to and pay up without quibbling, try that with a Bezos or indeed a Mone and there's probably a bit bit more push back...
As somebody said a couple of pages ago I don't think HMRC will have to do anything in quite a lot of cases. Saying that they will will get enough of those who should be paying tax worried enough to sign up for SA and pay it that they get that benefit of a decent proportion of the unpaid tax without having to lift a finger
Two things strike me though the first is that HMRC are clearly looking to automate all of this and nudge what mostly amounts to ‘small fry’ into doing online self assessments for relatively trifling sums (a couple of grands worth of eBaying in a year for which they’ll score maybe £100 worth of CGT?), it doesn’t sound like they’re looking to make this a labour intensive task from their end.
That has been my point since the start of the thread but I have been assured by many that I am fretting over nothing and making a mountain out of a molehill and any turnover will be easily explained by just telling them there was no profit or providing a spreadsheet containing made up numbers for the purchase price to match the digitally recorded sale price for each item. Couldn't possibly need to evidence anything with receipts going back 10 years.
I am selling less on eBay these days as tend to give my stuff to charity (even bike stuff) so will look to stay under £1000 this year and then see what actually happens from 2025 with any automated reporting. I will just sell via the various non digitally recorded methods (and no I am not evading tax as I don't owe any!).
HMRC seem to suggest you are required to tell them if your income/turnover is >£1000. You only pay the tax on the profit but are required to declare the income source. I don’t make the rules… https://www.gov.uk/government/publications/selling-online-and-paying-taxes/selling-online-and-paying-taxes-information-sheet#:~:text=However%2C%20if%20your%20total%20income,Trading%20and%20Miscellaneous%20Income%20Allowance).
Guessing you didn't actually read the link you provided and see this bit "You can use our online tool to check if you need to tell HMRC about additional income."
This is the result I got when using the online tool (declaring that I have sold only personal goods and none over £6,000
"You do not need to tell HMRC about this income
You do not need to pay tax on personal possessions you sold for less than £6,000."
Happy now?
That has been my point since the start of the thread but I have been assured by many that I am fretting over nothing and making a mountain out of a molehill and any turnover will be easily explained by just telling them there was no profit or providing a spreadsheet containing made up numbers for the purchase price to match the digitally recorded sale price for each item. Couldn’t possibly need to evidence anything with receipts going back 10 years.
I didn't say make up the numbers and nor did anyone else afaict That's not the same as saying an estimate of what was paid for it new which by your own admission will be more than you sold for in the vast majority of cases - so even if you were trading (which you aren't) you'd be doing it at a loss and wouldn't have a tax bill to pay anyway.
I assume as someone earning over the top rate threshold you do a tax return anyway, so putting Nil or No in that box whatever the question will already be being done.
The £6000 limit is I believe related to CGT, the example being similar to that I used of buying a watch as an investment. This (existing, has 'always' been there) need to declare smaller value / but higher volume income and now making it easier to identify is to catch people who are trading / AirBNB'ing and avoiding declaring, not the hobby seller, but in doing that then yes it may require some to give an account of their selling to support why they don't need to pay tax on it.
You can I believe sell as many personal possessions as you like and there's a £6000 limit per item for CGT. If you happen to sell several items then as long as all are below £6000 then that's OK. That's not the same as a trader who buys things and then sells them to make a profit / as his business - as long as they aren't any more than £5999 then not paying tax on them isn't right, they aren't personal possessions. These are two separate bits of tax legislation.
They are going to look for volume, multiples of the same item, short ownership time, etc., to determine who's trading and who's doing a garage clear out.
They are going to look for volume, multiples of the same item, short ownership time, etc., to determine who’s trading and who’s doing a garage clear out.
You keep saying this sort of stuff with confidence, are you involved in the implementation?
When they look for volumes what would be a triggering volume - you don't know any more than I do.
When you say short ownership time, how will they know from looking at just what you sold - you don't know any more than I do.
and so on and so on.
@andrewH, at £400k a year, well above your monthly salary, the banks have already been submitting your details to HMRC,
i'd guess you bank with someone like santander, if it had been that global local bank they'd have shut you down by now for money laundering.
ps. how are you getting around the upfront fees, presumably you high spend and take out XX months 0% purchases. pay minimums and save the regular monthly spend..
a relative's friend was selling diamonds as a side hussle, payments going into his current account, his bank reported him 3 years ago, he got a £100k tax bill
sorry not sure what everyone else’s opinion on this is but i dont garee with this at all we already pay enough tax ect now they wanna take more from us just a joke
People aren't paying enough/what they owe though, that’s why this is being implemented. We aren’t being asked to pay more with this, just what we should be.
You keep saying this sort of stuff with confidence, are you involved in the implementation?
When they look for volumes what would be a triggering volume – you don’t know any more than I do.
When you say short ownership time, how will they know from looking at just what you sold – you don’t know any more than I do.
and so on and so on.
It's all information that's out there, on news sites, MSE, HMRC own site, etc. You don't need to be involved in the implementation to be able to understand who they are looking to 'catch' and who they aren't, just actually read and listen to what's already available.
eg: HMRC's BIM
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20205
You an others may not like or agree with the rules, might think they should be chasing other sources instead, whatever. That's not up to me, don't shoot the messenger. In the end YOU are responsible for YOUR compliance and need to either read, understand, and put into place ways to demonstrate compliance if necessary (if you might be flagged as a volume transactor for example) - or by all means contract it to 'an expert' who will inform you from a professional standpoint. Or, as Martin Lewis himself suggests....
If you think you owe tax, you should file a self-assessment tax return as soon as possible by going to Gov.uk. The deadline for the 2022/2023 tax year is 11.59pm on Wednesday 31 January – see our news story on the self-assessment deadline for more information.
It's worth noting that even if you have to submit through self-assessment, this doesn't necessarily mean that you'll owe any tax, depending on what allowances you're entitled to.
If you don't think you owe any tax, you don't need to do anything. If a digital platform you use passes your information on to HMRC, it will also send a copy to you – you can use this to double-check your earnings and make sure you definitely don't need to file a self-assessment tax return.
Correct JonV.
As I now personally seem to be above the threshhold, I registered last year and am doing a self assessment HMRC return for 2022-2023. I dont think I have much tax to pay, if any, however I dont want be retrospectively fined for not submitting a return, also I will have tax to pay for 2023-2024 so doing it for last year is good practice to get it right for when it matters.
Whether I think current HMRC tax rates and policy are fair or effective is completely irrelevant to this.
It’s all information that’s out there, on news sites, MSE, HMRC own site, etc. You don’t need to be involved in the implementation to be able to understand who they are looking to ‘catch’ and who they aren’t, just actually read and listen to what’s already available.
I know exactly who they are trying to catch and completely agree they should be caught and paying tax on profits made as a trader.
And no the information is not out there on the specifics of what is going to trigger any requests and I am guessing they don't even know themselves yet and certainly won't have implemented any automated triggering as not in effect until next year.
Don't know if you have been involved in any automated reporting implementations but they tend to be very black and white. If they don't automate then great but you would hope with it being data based they will be as it is not exactly hard to do.
The ‘occasional’ seller exclusion applies if the platform facilitated fewer than 30 sales, and the seller received no more than €2,000 (approximately £1,700) in a reportable period.
Pedantically you are right in that HMRC hasn't specifically said what they will use but as above I'd be highly surprised if it's vastly different from what they have been able to request from UK based transaction facilitators already.
Remember, the ONLY change is that they can now ask for this from other OECD based platforms.
I think there will be a lot of Ebayers who know they are taking the piss and some will get a bit of a shock if they have to pay up. My wife does some trading on EBay and keeps good records but it can be bit messy as she sells things on my behalf like old camera gear which she sells and I then reinvest in new camera gear etc.
It seems like a lot of post covid airbnb people are the ones who are inline for the biggest shock if found to be outside of allowances. How people think they can make thousands of pounds with no tax obligations is just staggering.
