woodenhead Posted January 2 Share Posted January 2 (edited) If you are regularly selling on Ebay (and other sites), you might want to consider what impact that might have on your tax. https://www.bbc.co.uk/news/business-67855872 This feels like something that might cause a number of people who are already concerned about selling on Ebay into the hands of secondhand dealers who will offer a pittance for the items. Edited January 2 by woodenhead 2 1 Link to post Share on other sites More sharing options...
Sjcm Posted January 2 Share Posted January 2 Have looked at this myself. 1000 allowance sort of covers it for me, plus you have to make a profit and I'm always ahead on my purchases compared to sales. Add in the fact I keep a lot of stuff I buy and it would be hard to prove it was a side hustle rather than just buying smart. Link to post Share on other sites More sharing options...
APOLLO Posted January 2 Share Posted January 2 What about a deceased persons spouse / children selling a (say model railway collection) on ebay etc. May affect a lot of people on here. Brit15 4 Link to post Share on other sites More sharing options...
RMweb Gold BoD Posted January 2 RMweb Gold Share Posted January 2 (edited) 1 hour ago, woodenhead said: This feels like something that might cause a number of people who are already concerned about selling on Ebay into the hands of secondhand dealers who will offer a pittance for the items. is there a difference between selling on your own second hand pre owned items and trading for profit. It does say they don’t have to report under 30 items per annum which I guess would cover most selling of personal property. Although if I (or someone else) tried to list all of my rolling stock at once… Edited January 2 by BoD 1 1 Link to post Share on other sites More sharing options...
Sjcm Posted January 2 Share Posted January 2 11 minutes ago, APOLLO said: What about a deceased persons spouse / children selling a (say model railway collection) on ebay etc. May affect a lot of people on here. Brit15 Yeah it stinks basically. Another attempt to audit everyone's assets down to the penny along with a cashless society. If you sell your car for 2k does that mean you pay tax on it. What if you bought it 2nd hand with cash 5 years ago? Can you prove you're not selling it for a profit? People will sell on marketplace or car boot fairs if they're clever 3 3 Link to post Share on other sites More sharing options...
Tofufi Posted January 2 Share Posted January 2 It's an interesting one. It seems eBay have already been providing this data voluntarily since 2010. https://community.ebay.co.uk/t5/Seller-Central/Are-your-taxes-in-order-eBay-now-sending-sales-data-to-HMRC/m-p/7517171#M655772 I'm a little worried, as I've sold a fair chunk of my collection, mostly older locos I didn't use or projects, in the last year or two to fund a wedding and a house move. The total sale price has certainly been above the £1k threshold. In my favour, much of what I've sold 've owned since childhood, and the value of my sales month on month is winding down as I'm running out of things I want to sell. I don't know how much proof they would need that I am having a clearout, rather than buying and selling purely for profit. 1 Link to post Share on other sites More sharing options...
woodenhead Posted January 2 Author Share Posted January 2 I've not seen any more detailed information other than media reporting but it seems to cover everything and is based on sales value not profit which clearly Ebay and other companies selling online would not know. So if I buy a loco for £100 and sell it for £90 I've lost £10 but Ebay would report £90 income to the tax authorities and I guess I would have to prove I made nothing from the sale. Subject of course to reaching the reportable threshold etc. As a lot of people sell secondhand for a sideline which to many of us would look like a business I guess that any sales on Ebay fall into this category regardless of if we are clearing out stock we no longer want or it's someone buying and selling secondhand goods. 1 Link to post Share on other sites More sharing options...
Michael Hodgson Posted January 2 Share Posted January 2 4 minutes ago, BoD said: is there a difference between selling on your own second hand pre owned items and trading for profit. As I understand it, legally yes there's a difference. But as far as ebay/the taxman can tell, probably not. How they could tell the difference is anybdy's guess. So Ebay will just tell the authorities if you've sold more than £x and the taxman will presumably assume you must be trading and send a demand which you would then have to challenge. I can see this ending up in court with a lot of lawyers making a fortune out of arguing the toss - but that's what lawyers do. 14 minutes ago, APOLLO said: What about a deceased persons spouse / children selling a (say model railway collection) on ebay etc. May affect a lot of people on here. Brit15 That's slightly different. If you're disposing of an estate, there may be a liability to Inheritance Tax, and if there's chattels such as a model railway, they are part of the value for probate purposes. Most people don't leave enough for there to be a liability to this tax though. There may be a case for for running the sales under a different account name to show that it's a deceaased estate rather than trading. This is one of those laws that will create a load of bureaucracy, loopholes and will generate very little additional income to the exchequer, which is bad tax law - but I think it's being foisted on us by some international treaty intended to reduce tax evasion by those who are genuinely trading but not declaring it. 1 2 1 Link to post Share on other sites More sharing options...
Michael Hodgson Posted January 2 Share Posted January 2 3 minutes ago, woodenhead said: So if I buy a loco for £100 and sell it for £90 I've lost £10 but Ebay would report £90 income to the tax authorities and I guess I would have to prove I made nothing from the sale. Subject of course to reaching the reportable threshold etc. That could happen if you were trading too. Some of your sales would be unprofitable - for example all those latest models that could only be sold by very heavy discounting. Hopefully they are outweighed by the sales you do make a profit on. Link to post Share on other sites More sharing options...
woodenhead Posted January 2 Author Share Posted January 2 @Michael Hodgson Indeed. This is clearly to target people making money in the Internet economy, but people selling their own pre-owned stuff to make some cash are going to be caught up in this. Selling a deceased estate clearly could get caught up though there should be a solicitor somewhere involved managing that process to advise on implications for particular sales. You can imagine down the line smaller online selling entities like even the Market Place here on RMWeb getting caught up and I would imagine Warners would immediately remove the function rather than go down a complicated recording and reporting process to HMRC. 2 1 1 Link to post Share on other sites More sharing options...
RMweb Gold sjp23480 Posted January 2 RMweb Gold Share Posted January 2 (edited) Based on the following HMRC guidance: https://www.gov.uk/government/publications/reporting-rules-for-digital-platforms/reporting-rules-for-digital-platforms most people will be unaffected by the new regulations. As noted it is part of an international (OECD) drive to address tax evasion. Looks like the measure is intended to catch "businesses" that use digital platforms to generate revenues but don't declare them. It looks like any tax burden would be subject to corporation tax or income tax in the case of a sole trader. Having said that, there are instances where Capital Gains Tax or Inheritance Tax still might apply, as mentioned earlier. At this (early) stage, HMRC have only estimated the cost (£36mm pa for the 24 FTE needed to oversee it), with no estimate of the additional tax revenue it might generate. Seems pretty much unpoliceable unless there are very clear cut instances of individuals not declaring the income, probably more likely on platforms like AirBnB? Edited January 2 by sjp23480 Added text 1 1 Link to post Share on other sites More sharing options...
Sjcm Posted January 2 Share Posted January 2 Way I see it they have to take into account your purchases because if they're claiming your running an eBay business, then purchases is part of the bottom line. Ebay can report sales of over 1000 but you would have to be flogging a lot I would have thought to attract the tax man. Otherwise it's going to cost them a fortune chasing everyone who has sold a 1000 pounds worth of items. 1 Link to post Share on other sites More sharing options...
RMweb Premium Andy Hayter Posted January 2 RMweb Premium Share Posted January 2 21 minutes ago, woodenhead said: @Michael Hodgson Indeed. This is clearly to target people making money in the Internet economy, but people selling their own pre-owned stuff to make some cash are going to be caught up in this. Selling a deceased estate clearly could get caught up though there should be a solicitor somewhere involved managing that process to advise on implications for particular sales. You can imagine down the line smaller online selling entities like even the Market Place here on RMWeb getting caught up and I would imagine Warners would immediately remove the function rather than go down a complicated recording and reporting process to HMRC. If you are selling as an executor or on behalf of an executor, then quite possibly yes. However if you have inherited models (already taken into account as part of any inheritance tax calculation) and then decide to sell some or all, I think you are very much on your own. 1 Link to post Share on other sites More sharing options...
Tofufi Posted January 2 Share Posted January 2 3 minutes ago, Andy Hayter said: If you are selling as an executor or on behalf of an executor, then quite possibly yes. However if you have inherited models (already taken into account as part of any inheritance tax calculation) and then decide to sell some or all, I think you are very much on your own. In that case, they would be counted as 'personal possessions'. From the HMRC website: Quote Did you only sell personal possessions? Personal possessions are physical items that belong to you, such as clothes, furniture or jewellery. Items that you bought with the intention of selling to make a profit are not classed as personal possessions. This guidance appears unchanged, as the new rules only relate to the obligation of platforms such as eBay to report on sellers: https://www.gov.uk/check-additional-income-tax 1 Link to post Share on other sites More sharing options...
Popular Post andyman7 Posted January 2 Popular Post Share Posted January 2 (edited) This is a typical HMRC scare story picked up by the press and causing phenomenal wibble all over the 'net. - No rules have changed. You DO NOT pay ANY tax on selling ANY of your own possessions. The £1000 limit applies to 'trading', where you make stuff to sell or by stuff to sell on. - For many years now ebay and other trading platforms have been obliged to provide transaction data to HMRC to help them in monitoring who may be trading and not declaring (or under-declaring). - From this year the data flows will be automated. This may mean more 'nudge' letters going out from HMRC to people, and they may follow up with people who they think warrant further investigation. This is highly likely to target people selling clothes or mobile phones in bulk and they are extremely unlikely to bother with someone who has sold on a couple of Accurascale Deltics - if you TRADE and MAKE A PROFIT and your overall turnover is over £1000 you should declare this on your tax return and you will be taxed on overall profit only (you can offset losses and legitimate costs). For the avoidance of doubt, there is NO capital gains liability on model railways either - in taxman terms they are 'wasting assets' designed to be used and disposed of. The problem with these kinds of scare stories is that oligarchs with their clever accountants carry on using every tax dodge going but ordinary people see these stories and thing that they have to pay tax on selling their own possessions bought from their own taxed income and disposed of perfectly legally with no tax liability owing whatsoever. Edited January 2 by andyman7 6 11 2 4 Link to post Share on other sites More sharing options...
andyman7 Posted January 2 Share Posted January 2 (edited) 1 hour ago, woodenhead said: I've not seen any more detailed information other than media reporting but it seems to cover everything and is based on sales value not profit which clearly Ebay and other companies selling online would not know. So if I buy a loco for £100 and sell it for £90 I've lost £10 but Ebay would report £90 income to the tax authorities and I guess I would have to prove I made nothing from the sale. Subject of course to reaching the reportable threshold etc. As a lot of people sell secondhand for a sideline which to many of us would look like a business I guess that any sales on Ebay fall into this category regardless of if we are clearing out stock we no longer want or it's someone buying and selling secondhand goods. To use this as an example, point 1 is 'intent': - If you buy the loco for £90 intending to sell it for £100 the £10 profit is taxable, once you have deducted any fees, travel costs, etc. Your taxable amount is net of all such activity so losses can be used to offset profits. However this is only the case when your total trading exceeds £1000 for the tax year. - If you buy a loco for £90 and later need the money, and manage to sell it for £100, that is not trading and no tax is due. HMRC will not send any tax demands. Their first step would be a 'nudge' letter to ask whether you are declaring everything you should. Simply telling the truth is all that is required. I spend rather too much on model railways and try and offset this by selling models I no longer need or want. As a hobby it's fun, but as a side hustle it would be hopeless because there is no 'profit', just money coming in that helps offset the money going out. As a 'business' it makes a loss every year 🙂 Edited January 2 by andyman7 14 Link to post Share on other sites More sharing options...
woodenhead Posted January 2 Author Share Posted January 2 @andyman7 Thanks I was posting in the hope someone who understood it more might be able to add some context like this. 2 Link to post Share on other sites More sharing options...
RMweb Premium Hal Nail Posted January 2 RMweb Premium Share Posted January 2 Until now, having a spreadsheet recording all my purchases (and occasional sales) might have been considered a bit anal. Now it looks rather smart. #smug 4 2 Link to post Share on other sites More sharing options...
Michael Hodgson Posted January 2 Share Posted January 2 1 hour ago, woodenhead said: @Michael Hodgson Indeed. This is clearly to target people making money in the Internet economy, but people selling their own pre-owned stuff to make some cash are going to be caught up in this. Selling a deceased estate clearly could get caught up though there should be a solicitor somewhere involved managing that process to advise on implications for particular sales. You can imagine down the line smaller online selling entities like even the Market Place here on RMWeb getting caught up and I would imagine Warners would immediately remove the function rather than go down a complicated recording and reporting process to HMRC. You don't need a solicitor to sell a deceased estate - I dealt with my father's will myself. There was a solicitor, but only later when my mother also died, and that was only for conveyancing on the house sale. Like most people's the total value of the assets was below the threshold where tax is due. Essentially I had to go to a court and swear that the info I had put on the form was true. Because of the way house prices have gone recently, more people especially in London will now be finding they do have a bill to pay, but the process is the same - do the sums, fill in a return, and pay the tax if there's any due. As for flogging a few knick-knacks or whatever on ebay, the Revenue really isn't interested in tuppeny hapenny transactions by private individuals. The new rules should not affect you selling the odd loco. Somebody like Rails of Sheffield selling second hand stuff on ebay all the time will be covered by the trading category - but I have no doubt that they will be keeping proper accounts, and their tax liability is presumably exactly the same as it is when they sell the stuff in their shop. The requirement on ebay to report their activity shouldn't bother them, if anything it helps them by levelling the playing field if they face less scrupulous competitors who may be trading without paying their tax. But I can't see the authorities having the resources to chase every tin-pot cowboy trader who isn't declaring some small beer activities. 2 1 Link to post Share on other sites More sharing options...
Sjcm Posted January 2 Share Posted January 2 Reading between the lines I would take the 1735 figure at the point they may take interest if your selling or tax affairs raised red flags. The 30 items bit is obviously some arbitrary number pulled out of the ether and you could easily sell x3 items more than that and not make 1735. Link to post Share on other sites More sharing options...
RMweb Premium rab Posted January 2 RMweb Premium Share Posted January 2 2 hours ago, Sjcm said: Yeah it stinks basically. Another attempt to audit everyone's assets down to the penny along with a cashless society. If you sell your car for 2k does that mean you pay tax on it. What if you bought it 2nd hand with cash 5 years ago? Can you prove you're not selling it for a profit? People will sell on marketplace or car boot fairs if they're clever Or is it another case of the the few spoiling it for the rest??? 1 Link to post Share on other sites More sharing options...
RMweb Premium petethemole Posted January 2 RMweb Premium Share Posted January 2 I am selling various things I have collected over the years, plus some of SWMBO's unwanted clothes, shoes and plushies. I have been selling for 5 years, typically have 400+ items listed and make on average c£100 a week to augment my pension. This worries me slightly as I may appear to be a trader, although it's all our own stuff. Hopefully the HMRC info will enlighten me. 6 Link to post Share on other sites More sharing options...
Sjcm Posted January 2 Share Posted January 2 4 minutes ago, rab said: Or is it another case of the the few spoiling it for the rest??? Well that's what they sell it as. The reality is they don't want people making a few quid at a car boot sale or having 500 pounds under the mattress unless they know about it. Their ideal is for every penny to be accounted for electronically. Big brother. 3 Link to post Share on other sites More sharing options...
Michael Hodgson Posted January 2 Share Posted January 2 As others have said, this is a media scare story. From the offical document referenced above ..... "Policy objective The regulations will support the government’s work to help taxpayers get their tax right first time, and to bear down on tax evasion. While HMRC already has the power to access information from UK-based platforms on the income of sellers on the platform, implementing the OECD rules will enable HMRC to exchange information with other tax authorities to access data from platforms based outside the UK quickly and efficiently. ... "Detailed proposal Operative date The regulations will apply from 1 January 2024, with reporting due from January 2025. Current law This is a new measure and does not amend any current law. Proposed revisions This measure implements the OECD “Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy” (as later extended) in the UK by introducing regulations which incorporate the OECD rules and provide for enforcement and penalties. ... "Economic impact This measure is not expected to have any significant macroeconomic impacts. Impact on individuals, households and families The measure is not expected to have an impact on individuals who use digital platforms to buy goods or services. This measure is not expected to have an impact on family formation, stability or breakdown. 3 Link to post Share on other sites More sharing options...
APOLLO Posted January 2 Share Posted January 2 Cars / Classic cars are exempt even if they rise in value https://www.georgehay.co.uk/blogs/2019/09/will-pay-capital-gains-tax-classic-car/ But if you trade in them etc you pay tax. Brit15 2 1 Link to post Share on other sites More sharing options...
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