Ebay selling and TAX

[laughingboy]

It is very possible that revenue will be over £1k in this case so does the person need to fill out a self assessment form giving revenue - cost figures? Or does this become a grey area?

There are two taxes being talked about: Income Tax and Capital Gains Tax. For box swapping, income tax won't apply unless there is a trade (box swapping is not a 'trade', see above). I guess the £1000 limit for income tax is intended for people with a small trade (a 'side hustle' in modern parlance), so as not to require tax returns when the trade is almost immaterial (e.g. someone who lets out their property to friends, once a year).

As for CGT, it is also unlikely to apply. See above. No CGT on single items worth less than £600 and Hi-fi is likely a wasting asset under CGT and therefore exempt.

 

[vacuum_tubes]

We're on the same page. I'm saying it's not trading:

"If you are simply box swapping as part of a hobby, you are not 'trading', for tax purposes."

Apologies, still fighting covid brain fog at the moment.

 

[clivem2]

There are two taxes being talked about: Income Tax and Capital Gains Tax. For box swapping, income tax won't apply unless there is a trade (box swapping is not a 'trade', see above). I guess the £1000 limit for income tax is intended for people with a small trade (a 'side hustle' in modern parlance), so as not to require tax returns when the trade is almost immaterial (e.g. someone who lets out their property to friends, once a year).

As for CGT, it is also unlikely to apply. See above. No CGT on single items worth less than £600 and Hi-fi is likely a wasting asset under CGT and therefore exempt.

It sounds to me that sales will need to be declared if over £1k. Eg if I sell my London Reference for £1.5k I need to state I’ve owned it for 8 years…but I don’t have the original receipt. Will they believe me? They should do if I only sell a few items in a year but HMRC tend slap you with a bill and then it’s difficult to get into a conversation with them.

 

[laughingboy]

If you are not a 'trader', you can ignore the £1000 limit. See here (HMRC information sheet):

"if you earn more than £1,000 before deducting expenses through your trading, you will need to pay Income Tax on this."

 

[pidge22]

New rules came into force yesterday meaning that Ebay & other digital trading platforms have to report sales of £1,735 or 30 items & over per annum from private individuals to HMRC with the first reports being submitted in January 2025 for the calendar year 2024.
I believe that HMRC considers sales of 1k or over by a private individul per tax year to warrant that individual registering as self employed & paying tax accordingly.
Most hifi sales etc on Ebay from PFM members would use that allowance in one sale so thought I would give a heads up

Airbnb, eBay, Vinted and other apps to share more information with HMRC

New rules mean online retail platforms including Airbnb and eBay will share more information with HMRC.

www.bbc.co.uk

 

[Ducatiist]

I saw this on TV yesterday...it seems quite an odd strategy by HMRC as a lot of people that sell stuff on eBay and Vinted are just selling stuff to clear clutter or wardrobes and kids clothes...not necessarily making any profit on their stuff, in fact normally making a loss compared to what was originally paid.
This making a loss scenario is often the case with Hi-Fi sales too; I'm wondering if you can prove a loss would HMRC allow you to claim tax back???
I somehow think not

 

[jason rockley]

I thought ebay already had rules in place once you go over a certain sales income threshold? I got asked to convert to a business account when I went on a box swapping frenzy a few years ago.

 

[amazement]

I can see the window tax making a return the way things are going, or tax the air we breath.

 

[Paul Hindle]

It’s not clear as to whether the tax is on income or profit. If you buy on eBay something worth £1200 and sell it on for £1000 a year or so later you’ve lost £200. Or am I missing something?

 

[tiggers]

Yeah, let's get those evil tax dodgers selling those secondhand items online (with all the hassle that comes with listing them and dealing with a proportion of idiot customers). Meanwhile the huge corporations carry on paying little tax as they avail themselves of the nice legal loopholes left in the tax system by their mates in government!

 

[Rob Stockman]

amusing giving this govt's recent history, that the threshold is 2000 euros.... which converts to £1735.

so maybe a european tax they've "allowed through"?

 

[Richard Lines]

It’s not clear as to whether the tax is on income or profit. If you buy on eBay something worth £1200 and sell it on for £1000 a year or so later you’ve lost £200. Or am I missing something?

A very good question.

If you sell a DIY built amplifier one assumes that the hours put into sourcing the parts and actually building it would mean, in many cases, actually selling at a loss. I'm sure those awfully nice people at HMRC would be understanding.

I can see interesting times ahead.

It will also be very labour hours intensive.

Meanwhile very large corporations continue to be allowed to avoid paying their due taxes in this country........ much greater returns to be had there with less effort (if the right laws were in place)??

Regards

Richard

 

[stevec67]

If you are not a 'trader', you can ignore the £1000 limit. See here (HMRC information sheet):

"if you earn more than £1,000 before deducting expenses through your trading, you will need to pay Income Tax on this."

We all appear to be in violent agreement here. This change in rules might flag up the odd person with a fairly active side hustle, but as we all seem to agree this isn't the guy offloading half a dozen records and an old CD player every couple of months. If HMRC want to come after me for tax on the proceeds of the portable TV I'm selling, they can, assuming they have nothing better to do. I'll have to sell it first, but they might want to get in early. So if HMRC are listening, it's up at £30 on Gumtree, collection only. When it goes, I'll let you know and you can claim the tax. Collection only, of course.

 

[Tony L]

The more I think about it the more of a gigantic squirrel it appears. A means to focus an already vastly diminished and over-stretched HMRC far away from the multi-£bn corruption of Sunak, the £600,000,000 of largely dodgy contracts awarded in Matt Hancock’s time as Health Secretary, the offshore tax havens and money laundering of billionaire party donors etc. It is a cheap deflection tactic to divert attention away from the industrial-levels of criminality at very the heart of the modern Conservative Party and their funders. Classic fascism. Attack the poor and struggling to ring-fence the wealth and power of the ruling party.

 

[clivem2]

It’s not clear as to whether the tax is on income or profit. If you buy on eBay something worth £1200 and sell it on for £1000 a year or so later you’ve lost £200. Or am I missing something?

I get the impression the £1k income figure is for declaration purposes whereas taxation is on actual profit. My worry is that selling say 5 pieces of hifi in a year could have tricky consequences. If I sell my 8 year old London Reference for £1k+ I can argue I’m not a trader but I don’t have the original receipt so may look dodgy. When I sell 4 more items bringing the total up to say £3k…what happens when HMRC insist I’m a trader and they are impossible to contact to explain - I’d then write to them, they then write back to say they still think I’m a trader. I have a huge lack of trust in the system…

 

[vacuum_tubes]

I believe that HMRC considers sales of 1k or over by a private individul per tax year to warrant that individual registering as self employed & paying tax accordingly.

Not sure how some employers would react to that, I've had a few jobs where they didn't allow 'moonlighting' via self employment, being a director of a LTD company etc.

It’s not clear as to whether the tax is on income or profit. If you buy on eBay something worth £1200 and sell it on for £1000 a year or so later you’ve lost £200. Or am I missing something?

Tax is only due on profit, losses offset profit e.g if you make a loss of £500 on one sale and profit of £2000 on another you only pay tax on net profit of £1500

 

[vacuum_tubes]

The more I think about it the more of a gigantic squirrel it appears. A means to focus an already vastly diminished and over-stretched HMRC far away from the multi-£bn corruption of Sunak, the £600,000,000 of largely dodgy contracts awarded in Matt Hancock’s time as Health Secretary, the offshore tax havens and money laundering of billionaire party donors etc. It is a cheap deflection tactic to divert attention away from the industrial-levels of criminality at very the heart of the modern Conservative Party and their funders. Classic fascism. Attack the poor and struggling to ring-fence the wealth and power of the ruling party.

Yep, it's also an easier target.

They make you do the self assessment and calculate how much tax you owe them so it takes up little HMRC resource.

PAYE/self employed are easy and pretty much defenceless targets for tax whereas big companies have teams of accountants and tax lawyers to run rings around HMRC.

 

[Tony L]

Tax is only due on profit, losses offset profit e.g if you make a loss of £500 on one sale and profit of £2000 on another you only pay tax on net profit of £1500

It would still involve anyone selling anything of value keeping full accounts and filing a tax-return and HMRC having the staff and overhead to maybe double or treble their workload as literally millions of people sell stuff on eBay. Just never going to happen. I smell giant squirrel.

They make you do the self assessment and calculate how much tax you owe them so it takes up little HMRC resource.

Not my area of knowledge, but I’d expect this cause a lot of issues for people already in full PAYE employment as it may involve disclosure to employers etc which as mentioned upthread may be in breach of contract just by running an additional self-employment set of accounts.

The area where it couldn’t be more Tory is it will obviously hit those on low-income disability benefits etc who may be desperately scrabbling to earn a little to boost their deliberately punishing pittance by flipping a few things in their areas of expertise. As ever with Tories the cruelty is the point; they are fine stealing literally £bns themselves, but they want refugees to drown and the disabled, unemployed or homeless to just die on the streets. Again, the tried and tested tools, carefully engineered divisions and rank corruption of fascism.

 

[pidge22]

Surely the answer is don,t sell on ebay sell somewhere that dont have to submit to HMRC, I dont box swap much these days as firstly I can't be bothered & secondly the only upgrade I want to do is to my hearing which is deterioating rapidly but if i did I would avoid Ebay anyway due to the charges & hassle ....The £1000 rule has always been in place its just certain digital platforms obligation to report that has changed...

 

[Tony L]

Surely the answer is don,t sell on ebay sell somewhere that dont have to submit to HMRC, I dont box swap much these days as firstly I can't be bothered & secondly the only upgrade I want to do is to my hearing which is deterioating rapidly but if i did I would avoid Ebay anyway due to the charges & hassle ....

I think the takeaway here is far-right state authoritarianism is as expected pushing ever harder downwards. First they came for the refugees, the disabled, the trans people, the homeless, the eBay sellers…