Taxing income from eBay etc

[Ihavenojob]

Stories abound about HMRC getting online selling sites to inform them of money people make so they can be taxed. I sell a few things on ebay and get a fair chunk of money, but many items sold were bought to be used, then sold second hand, so you probably won't make any profit. I suppose people will now have to produce receipts from years ago to prove how much proffit they make, but what happens if you make a loss, can you claim a tax rebate? Not sure if the stories are true or just more scare mongering, or whether the rules will only apply to business sellers?

 

[Murdochcat]

HMRC have been getting figures from all online sites for years.

And yes they do target traders, and make them pay tax.

There is a huge difference between somebody selling a few items and an online trader

 

[noseall]

I only mess about as a tradesman, more of a handyman really. Can I be exempt from paying income tax please?

 

[SimonH2]

If the OP is buying things, using them for a while, then selling them when no longer needed - unlikely to be targetted.
It's the people buying stuff as stock to sell that makes them a trader.
There isnt a distinct cut off between the former but getting through quite a few items, and being a low volume trader. AIUI the first thing HMRC will look at is volume - for example, a genuine DIYer isn't likely to be turning over dozens of expensive tools a month.

 

[aveatry]

Everyone actually has an extra £1000 tax code personal allowance so you are allowed £1000 casual income from selling your second hand stuff and anything over that then the taxman in theory will be on your case.

 

[JohnD]

whether the rules will only apply to business sellers?

There are plenty of people who define themselves as "private sellers" but trade in hundreds or thousands of items in a month.

A true private seller might have one unwanted kettle or drill to sell.

A person selling fifty is obviously a trader.

I'm very happy to see traders paying tax.

Every pound they don't pay is a pound the rest of us have to chip in.

 

[Mottie]

Everyone actually has an extra £1000 tax code personal allowance so you are allowed £1000 casual income from selling your second hand stuff and anything over that then the taxman in theory will be on your case.

You don’t pay any tax on selling your own stuff but you are allowed £1,000 tax free earnings on the profits of selling stuff you’ve bought for resale or any other income from something that is not your main job. HMRC call it a 'side hustle'.

 

[ajohn]

It seems HMRC get interested when sales from people on ebay reach a certain level. VAT due levels figure as well. At some point a person has to be vat registered.

My son started an ebay based business when he came out of university. Took a while to find a job. He produces and sends off acounts every year and also uses an ebay business account. This changes their charges if some one uses a sufficient number of listings and changes how they are handled. He's also now paying PAYE and has been for some time.

 

[opps]

It seems HMRC get interested when sales from people on ebay reach a certain level. VAT due levels figure as well. At some point a person has to be vat registered.

My son started an ebay based business when he came out of university. Took a while to find a job. He produces and sends off acounts every year and also uses an ebay business account. This changes their charges if some one uses a sufficient number of listings and changes how they are handled. He's also now paying PAYE and has been for some time.

I was under the impression that selling pre-owned items as a "personal seller" was not VATable. The VAT was applied at the original point of sale, if however a business is selling second hand items, VAT is applicable (because the seller has a has had a professional role and added value to the resale process).

In your son's case, I cannot workout, from your description, what he does, but it he is using Ebay to generate an income as a service, then yeah, he will have to pay taxes, unless he can demonstrate that he was selling items that he had owned, and didn't purchase with a view to selling them on. It does seem to be a grey area though.

I think that you are correct about cut off points that pique the interest of HMRC.

 

[Mottie]

VAT due levels figure as well. At some point a person has to be vat registered.

When their turnover hits or expects to hit £85K in any 12 month period.

 

[SimonH2]

I was under the impression that selling pre-owned items as a "personal seller" was not VATable. The VAT was applied at the original point of sale

Correct

if however a business is selling second hand items, VAT is applicable (because the seller has a has had a professional role and added value to the resale process).

It's "more complicated" (of course it is, it's tax!)
Not everything the VAT registeted business buys will have had VAT on it, and IIRC not all VAT is reclaimable. There are various schemes covering businesses dealing in second hand goods.
IIRC one particular complicated case is where a non registered person/business buys a van/pickup. In this case, VAT is charged but can't be reclaimed. If that van is later sold to a VAT registered dealer who'll be selling it on, VAT can't be charged but was previously paid. There's a scheme just to cover such arrangements as (cinics may say "surprisingly") HMRC don't think it's fair to add VAT to a price that already had VAT included in it.
Thankfully I don't have to worry about VAT, and never had to deal with complicated cases in the distant past.

 

[Murdochcat]

When their turnover hits or expects to hit £85K in any 12 month period.

And HMRC can decide which 12 months to use too. So beware

 

[Ihavenojob]

I see another thread has been started about HMRC trying to get as much tax owed as possible (from multinationals), and the news today had an article about HMRC getting online sites such as ebay,vinted,airbnb etc, to report sellers making over £1k a year. What I wanted to know is how can they tax you on something you own and decide to sell it if you no longer need/want it? If I sell my car on ebay for £10k, why should I have to pay tax on it?

 

[JohnD]

If I sell my car on ebay for £10k, why should I have to pay tax on it?

You won't.

But if you make money as a used car dealer, you will.

 

[carmanmemoranda]

I see another thread has been started about HMRC trying to get as much tax owed as possible (from multinationals), and the news today had an article about HMRC getting online sites such as ebay,vinted,airbnb etc, to report sellers making over £1k a year. What I wanted to know is how can they tax you on something you own and decide to sell it if you no longer need/want it? If I sell my car on ebay for £10k, why should I have to pay tax on it?

Do you agree with traders paying tax ?