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

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???

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.

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.

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

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.

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?

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.

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?

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.

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.

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!

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

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

Martin Lewis has just written a comprehensive article about this:

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

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

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.

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

this is only if you make more than a £1000

Crackdown on second-hand clothes side-hustle: Customers making more than £1,000 in sales on Vinted, Etsy, Depop and eBay could be landed with huge tax bill in new HMRC clampdown

I don't think that they will be clamping down on people selling a few excess personal possessions - however many people are running small businesses using ebay or Vinted etc these days in the same way as second hand shops used to and should be paying taxes.

Also - and I am sure that the UK will catch up with this - some countries not only tax as income but selling on these sites also counts as income for benefits.

lemsip

this is only if you make more than a £1000

Crackdown on second-hand clothes side-hustle: Customers making more than £1,000 in sales on Vinted, Etsy, Depop and eBay could be landed with huge tax bill in new HMRC clampdown

The Martin Lewis article says that sites will only send information to HMRC of people who sell more than 30 items a year. How many people sell more than 30 items of second-hand clothes a year, unless they've bought them to sell - in which case they're conducting a business?

This is from Martin Lewis
Pls share.
Many are worried after reports that Etsy, eBay, Vinted etc will start automatically passing sales info on to HM Revenue. To set your mind at rest, in brief

1. There is no new tax
2. Unless you're 'trading' selling your old stuff isn't taxed
3. Only sales over c£1,700 or more than 30 items a year are reported

Yet far better is read our full guide which takes you through it

To clarify the taxation of rental businesses (and indeed most other businesses). The traditional method of accounting (the accruals basis) is to declare all income DUE in the accounting period, and to claim expenses INCURRED in the same period. That means if a tenant defaults the expected income is still taxable in that period, and (for example) claims for, say, heat and light, are apportioned to the period in which they are consumed (not when you get the quarterly bill but when you use the gas and electricity). If a tenant defaults the unpaid amount can be deducted from income in the period in which it becomes clear that it is not going to be received - for example, having taken the usual steps to recover it (including court action) and basically having no chance of ever getting it. An alternative is to use the "cash basis" which means if a tenant defaults you don't include that in your calculation of earnings for that period, but nor can you deduct a portion of any unpaid gas/electric bill either even if the power was used during the period.

Since online selling sites began I have heard of scores of people bragging about how much money they have made by effectively running businesses in this way. The first I heard of was a retired couple in a relatively smart town in middle England, the wife having a disability and claiming every state benefit possible (mostly non-taxable), making tens of thousands of pounds a year by buying imported toilet rolls by the lorry load and selling them to small independent shops for resale to the public. They declared nothing to either HMRC or to the benefits people so were basically screwing the country in a big way. You and I (who pay our taxes and don't claim benefits to which we are not entitled) have been paying for these people for years. Believe me, it amounts to a lot of millions that could be channelled into making our NHS what it should be, what it used to be, without the Tories claiming the country can't afford it or the Labour lot (hopefully I suppose winning this years General Election) putting up OUR taxes so they can appear to be the good guys.

I have spent a lifetime both in my profession as an Accountant and as a volunteer in local charities hearing of such travesties (and believe me some folks are PROUD of themselves for screwing the system) - and now I am in dire need of the NHS I am beginning to wish I had reported them all at the time.

But to all of you who are worried about selling your old clothes, a few bits of furniture, an unwanted exercise bike (mine is going on ebay this week!) or similar, you have nothing to fear. You won't be making a profit, you won't be doing similar 30 times a year, and if you are unfortunate enough to be questioned on it by HMRC (and a few will be, by mistake), just explain your transactions and it will be fine.

And if you do find (and sell) a Constable in the attic, you can make a Capital Gain of £6,000 a year without paying tax (and if you can show it was acquired by both you and your spouse that is doubled). I had a friend who, many years ago, recently deserted by her husband and left with two young kids and short of dosh, bought a ring from a charity shop for £5 and sold it for £15,000. It is so long ago that I can't remember what claim I helped her make that meant she paid no tax on the gain. I have some sympathy for the desperately hard-up making a bit of money, so my scruples aren't perfect!!

I think this reform is long overdue.

HMRC only administertaxation as directed by the government. they do not make the rules. If you think something is unfair or wrong consult your MP

If theyre your personal items why should you pay tax TWICE? We pay VAT when we buy things why are we paying again to declutter them?Bl**dy grabbing Government.Its same with the pensions- the pensioners have paid tax on their earnings- why should they pay again? Jeremy Hunt has a lot to answer for.

This government didn’t invent the current tax laws. You have a very short and selective memory and perhaps we’re not drawing your pension when Labour were in power. How long has Hunt been the Chancellor? Can you remember?