Plans to tax us for selling on eBay. What do you think?

Do you understand the difference between tax avoidance (legal) and tax evasion (illegal)? I suspect not.

Germanshepherdsmum

If everyone paid the taxes they should, we would all be better off.

Totally- but how could anyone claim that it is not the richest in the country who illegally avoid a lot mor tax than any cash in hand or social security fraud. And I do NOT condone either.

GSM my point exactly
Far too many people dodge taxes yet expect the government pay out
Don't get me onto the cash in hand economy

Martin Lewis has just written a comprehensive article about this:

www.moneysavingexpert.com/news/2024/01/online-platforms-etsy-vinted-airbnb-report-hmrc/

If everyone paid the taxes they should, we would all be better off.

Another ploy to screw as much out of us as possible .

cc

I'm a bit puzzled by the Ebay reports, if you're selling something you normally only pay tax on the profit you make and many on Ebay only sell their own old possessions. Surely they wouldn't be taxed on the whole amount?

There are numerous people who buy from various sources and then sell them for profit on eBay. I volunteered in a charity shop and there were regulars who came in and did the rounds, hunting out underpriced goods and often antiques.

They rely on the staff not recognizing the various labels that sell quickly online. Not difficult to tell as they are generally offering a very wide variety of sizes and styles. Unless they are extreme yo-yo dieters!

biglouis

If you regularly sell a small amount of stuff on Ebay then it can be to your advantage to do a self assessment return and claim for the multitude of business expenses you are allowed.

This would include all your Ebay and Paypal fees as well as the cost of postage, printing, computer equipment, phones, software, etc. Plus the actual cost of any parts of your home you use for work such as home office, storage etc. There are online articles which advise how to do this without incurring CGT (if you come to sell) or being liable for business rates.

As long as you use traditional accounting (rather than cash basis) any business loss for the Ebay sales can then be offset against other taxable income such as a pension or employed job.

Excellent post. Keep detailed records of all expenses.

Keep records of every single cost, hand off to accountant to sort.

I record expenses weekly, it's easy, could be done daily. No forgetting.

biglouis - do you really think that people who are just selling a small number of items on Ebay or elsehere would understand the traditional accounting basis

I learned basic bookkeeping in school. Its not rocket science.
My self assessment form takes me about half a day to do because I keep all the records I need.

There are several accounting programs you can buy and the purchase of these is also a tax deductable expense. Or you can pay someone to do your accounts/self assessment for you.

I sell my daughter's things mainly DGSs outgrown clothes as well as my own. Then I send her the money which she uses to buy DGS new clothes. Have bank statements to prove it and handwritten lists of what i sold for her. Will they tax me on this?

The legal position, Ramblingrose, is that if you are able to sue for rent it is deemed to have ‘arisen’ and to be taxable, regardless of receipt.

It is very easy as a lay person to identify traders on online selling forums (fora?). There will be the same item in different sizes for example. When I am shopping on Vinted or wherever, I avoid them as I feel it goes against the ethos of the site which is to sell your unwanted items for a few pounds. I have no issue at all with traders being taxed in the same way as someone running a market stall. It may also hopefully pick up those selling what are likely to be stolen items on FB marketplace; all those pairs of expensive trainers that 'don't fit' or were unwanted gift 'too late to return'. Really? all six pairs of them?

There are many sellers on Ebay who do not declare themselves as a business although it is clear that this is what they are. I have seen many who sell clothes week in week out of all different sizes. Also many who sell dozens and dozens of vintage items when there is no way these could be personal items. These are the people who should be paying tax. For the rest of us selling the odd household item or piece of clothing I very much doubt if anyone will be after us. And in any case everyone would have to record how much they paid for an item, how much they sold it for and then what their expenses were such as collecting or delivering the items etc. It would be too much for HMRC to ever cope with so most people don't need to worry. I do suspect though that HMRC might just randomly pick on one or two sellers and make an example of them in order to frighten everyone else.

Agree with Cossy.
And don't understand 250c70's point or GSM's about rental income due but not received being taxable.
On my self assessment returns I declare gross rental income actually received and actual outgoings (eg property repairs and certain other expenses). The outgoings that may be offset against gross rental income) are also declared so the tax due is on the net rental income. If tenants are in arrears and my rental income is reduced accordingly the gross rental income that I declare is reduced accordingly.
Where you might be taxed is if you are liable to make a payment on account for the following tax year which is based on an estimate of what tax due was in the current year being reported on the tax return. If you receive less rental or other income than the estimate you can reclaim the tax paid later.
I was very pleased to read that sellers on ebay and Airbnb
owners could be taxed on their income in future, depending of course on their tax situation in any given tax year. i

Jess20

It's ridiculous, we've bought/sold a caravan on eBay, plus a motorbike. Doesn't take much to go over the limit. Are we now being taxed for moving on second hand items like cars, boats etc? Why not look at big value transactions which is sold in a way that the cash can be removed from the country and tax avoided. Why always look at the low earners! An eBay shop is different but selling loads of stuff due to house move or downsizing etc .... really???

If you sold these for less than you paid for them you are not making a profit and so there is no tax liability.

You have your allowance - if you make profits which exceed it, why should the excess not be taxed? Your profits are income, are they not? Income is taxable. It sounds as though you have failed to declare.

It's ridiculous, we've bought/sold a caravan on eBay, plus a motorbike. Doesn't take much to go over the limit. Are we now being taxed for moving on second hand items like cars, boats etc? Why not look at big value transactions which is sold in a way that the cash can be removed from the country and tax avoided. Why always look at the low earners! An eBay shop is different but selling loads of stuff due to house move or downsizing etc .... really???

I really don’t understand what the issue is? If you make over and above your tax free allowance in profits, surely you should pay the appropriate tax

biglouis - do you really think that people who are just selling a small number of items on Ebay or elsehere would understand the traditional accounting basis?

25057C0 Of course people can deduct their outgoings apart from mortgage interest (which is a separate calculation). Agents are supposed to deduct tax at source from the gross rents but I've never seen that happen to the landlords whose tax returns I prepare. If it does happen then any tax overpaid will be refunded.

This rule was brought in because landlords often did not declare their rental income. Back in the 70s when I was training, building societies were only required to declare details of accounts to HMRC if there was less than £1000 in the account. Villains used to hold several such accounts for their illgotten gains and no one knew about them. They bought low priced houses - again these transactions weren't declared . In fact compulsory registration wasn't brought into the whole of England and Wales until 1990.

I mean if your earnings are above the personal allowance and you make more than £1000 per annum on eBay etc then that money has always officially been subject to tax.

I agree that people should pay tax on their earnings from ebay etc. We should all pay tax on our earnings wherever they come from, it's the law.

They also have to pay tax on the rent whether or not it is paid. It is the entitlement to receive rent which is taxable.

Now that landlords pay tax on the income from a rental BEFORE outgoings, I would say this is not impossible.

If you regularly sell a small amount of stuff on Ebay then it can be to your advantage to do a self assessment return and claim for the multitude of business expenses you are allowed.

This would include all your Ebay and Paypal fees as well as the cost of postage, printing, computer equipment, phones, software, etc. Plus the actual cost of any parts of your home you use for work such as home office, storage etc. There are online articles which advise how to do this without incurring CGT (if you come to sell) or being liable for business rates.

As long as you use traditional accounting (rather than cash basis) any business loss for the Ebay sales can then be offset against other taxable income such as a pension or employed job.

I don't know if this applies to the UK, but where I live there are people more-or-less running businesses buying and selling over e-bay and similar platforms, or on Facebook. I find it entirely in order that they should be taxed as any other business is, whether they are doing it part-time or full-time, as the tax evaluation is based on them having sold for more than a certain amount.

Those who sell under the amount are not going to be taxed, which ought to mean that those selling something out of necessity will still be able to do so.