Ebay to report sales to HMRC

[d8mok]

Just in case folk haven’t seen it …..

Is the taxman coming for YOUR Airbnb, Ebay or Uber side hustle?

New tax rules, set to be introduced on January 1st, could see thousands of people who earn a bit of extra income being caught out by the taxman,

www.thisismoney.co.uk

 

[fettler]

You sell your old bike on ebay for 4k. The tax man now takes 20 - 40% off you. Your new bike upgrade is even further away now.
I imagine they will target people who have regular/constant listings for many items. I know a few ebay sellers with literally hundreds of items for sale but they are not registered as business users. I know a lad who had HMRC come knocking a few years ago, they enquired about his ebay account selling old cycling stuff. Not quite sure where it ended up but he did stop selling for a while despite saying he was clearing out a lifetime collection. His sales for the half year so far was about 14K.

 

[mk one]

It only applies to traders.

 

[foz]

The same thing is coming (already here I think!) throughout europe, but from what I've read they will only report if an individual sale is over 2000 euros, or you make 15 sales in a year. I can see why they want to do it, and hope that they will concentrate on those people who have a viable "business" going on illegally (as in the above post). Otherwise, they are taking the proverbial... so I buy a brand new bike from a shop, say it costs 5k, 20% of which already goes to the government as VAT. A few years later I decide to sell it on, and they still want to take another 20% or however much, so I effectively am being taxed twice on the same bike... I can see this going two ways - either second hand goods will go up in price to compensate, or things will be exchanged cash in hand and the sales platforms will lose income because people won't use their payment channels

 

[Russell]

Key phrase is ‘earns’ more than £1k.

Buy a rear mech for £25, sell it a year later for £25, you’ve ‘earned’ nothing.

Of course, flippers and strippers and those who look to profit from our ‘hobby’ should start to consider keeping more accurate records

 

[foz]

It only applies to traders.

yes, but how do they define a trader? If I buy a used bike, keep a few parts that I need, and sell on the rest to make my money back, I am effectively a trader. Very small scale, but I am increasing my "worth", which is exactly what trading is...

 

[Betsy]

Asking for a friend...

I read some of it yesterday but my interest waned before i could find the answer to my question.. maybe i just fell asleep, anywho folks with more stamina might be able to answer it..

My 'friend' sells a bit through ebay, mainly clothing which i don't wear now i'm a full time cycle commuter.. some of this clothing is worth a few quid, but it also cost me a few quid, i'm not selling any of it for above what i paid therefore would this be considered a financial loss rather than a taxable gain?

There are a few old pairs of vintage sneakers i've sold for well above RRP but the vast majority of my sales come at a loss to me.. for instance, i sold a jacket a few months ago for £1100 but it cost me £1450 (¥270,000) so would HMRC consider this a £1100 taxable profit or a £350 loss? .. if so.. is that loss offset against my occasional gain?

 

[mk one]

You can sell a million things, it only applies if you bought the million things to sell to make a profit! Selling personal item is not the same.

The rules are still the same as they ever were, if you make over £1000 profit from selling items you bought to make a profit from then you have to declare it for tax purposes, same as always, only difference is now they have to give accounts to hmrc regularly instead of now and again.

 

[mk one]

yes, but how do they define a trader? If I buy a used bike, keep a few parts that I need, and sell on the rest to make my money back, I am effectively a trader. Very small scale, but I am increasing my "worth", which is exactly what trading is...

No, you did not buy the items to sell on to make a profit, you are merely selling personal items, not taxable.

 

[d8mok]

yes, but how do they define a trader? If I buy a used bike, keep a few parts that I need, and sell on the rest to make my money back, I am effectively a trader. Very small scale, but I am increasing my "worth", which is exactly what trading is...

Yes that would be classed as trading.

The key is to keep records of purchase prices , and what that bike split for. Remember to deduct any costs / fuel. The key is likely to make sure those numbers are the same and you are left with ‘stock’ you’ll keep forever