eBay and HMRC

You could sell literally everything you own, and it’s not a business. Buy lots of things to try and sell at a markup, and it is.

Jesus Christ cookeaa– you are going to try and persuade your partner and mum to do a self assessment and actually pay a token fabricated amount to HMRC because they may have gone over the dreaded threshold, even though you have no idea if they made a profit or not? – That is beyond silly.

Meh, isn't there a fine for late/non-submission?

Plus if eBay have "grassed" on her because of  their simple sales volume/value threshold, she kind of has to do it right? I'm not compelling anything,

For the sake of a frustrating evening online, and a couple of hundred quid I'd rather she squares it away TBH... It'll maybe persuade her to either keep better track of profits/loss and turn a hobby into a job, or knock the whole thing on the head.

Meh, isn’t there a fine for late/non-submission?

There is, and it is an ongoing fine that goes up as it gets later

Cookeaa - How on earth could you be fined for late submission of a return that you are not expected to make, unless your partner / mum is already registered as self employed and already actively partakes in the buying and selling of goods from charity shops for the purchase of making a profit of course?

Where do you get the figure of 'a couple of hundred pounds from'? - Is this something you have plucked out of thin air? Do you have any experience with expensing a 'business' in order to come to this figure, aspects such as personal use of phone, storage, travel to and from the shops in order to buy the items etc? - Filling a bullshit tax return out just so you can pay some money is bonkers.

If you do, in some fantastical universe, receive a letter asking if you should have filed a tax return based on the fact you sold a piffling sub £2k amount on ebay from HMRC you still don't need to file a return if you aren't required to do so -Self Assessment tax returns: Who must send a tax return - GOV.UK

Punishing your partner into making a tax return in this situation in order to force her into being more organised is bizarre, but then many people on this thread are - I can see half of the people here submitting a tax return in blind panic soon because they sold their 5 year old bike on Ebay and breached the threshold.

did the ops family friend register a new ebay account in 2024,

if not they've got a   "get out of jail card, dont collect £50 on passing go"

did anyone read this article, Selling online & HMRC | UK Seller Centre

i've posted the important bit below and the sentence is Highlighted in BOLD.

---------------

Do I have to share information with HMRC?

did the ops family friend register a new ebay account in 2024,

if not they’ve got a “get out of jail card, dont collect £50 on passing go”

Not my area of specialism but I'm pretty sure that's referring to eBay passing info to HMRC.

The requirement to pay tax if you're making money online trading has always been there, hence:

However, this reporting doesn’t change your tax obligations.

There seems to be a basic confusion here in many posts: eBay reporting something to HMRC does not make anyone liable for tax and *DOES NOT EVEN MEAN THEY HAVE TO DO A TAX RETURN AND DECLARE IT*

If HMRC wants you to do a tax return that's for them to ask, but there's no earthly reason why they would want to for someone selling assorted 2nd hand goods that yield 1k or so in cash.

Plus if eBay have “grassed” on her because of their simple sales volume/value threshold, she kind of has to do it right?

No! You don't have to do anything (pay more tax, complete a self-assessment, declare yourself a sovereign citizen) just because eBay passed transaction information to HMRC. That's why all the Chicken Licken comments have not been taken seriously.

The HMRC Badges of Trade are criteria used by HM Revenue and Customs (HMRC) in the UK to determine whether an activity constitutes a trade, which would make any profits from that activity subject to income tax or corporation tax. These “badges” are guidelines derived from case law to assess whether an individual or business is trading or engaging in a hobby or investment activity.

Here are the 9 HMRC Badges of Trade:

1. Profit Motive

• Is the activity carried out with the intention of making a profit? A clear profit motive indicates trading.

2. Frequency or Number of Transactions

• Repeated or frequent transactions suggest trading, whereas one-off sales are less likely to be considered trade.

3. Nature of the Asset

• If the asset is one typically associated with trading stock (e.g., goods sold in a shop), this suggests trade. Assets held as investments (e.g., property or shares) might not.

4. Existence of Similar Transactions

• Engaging in similar transactions, even in the past, could indicate trade, especially if a pattern of buying and selling emerges.

5. Changes to the Asset

• If an asset is improved, repaired, or modified to make it more marketable, it suggests the intention to trade.

6. How the Asset was Acquired

• If the asset was purchased with the intention to sell (rather than for personal use or enjoyment), this supports the case for trade.

7. The Method of Sale

• Selling goods in a manner typical of a business (e.g., through advertising or a commercial platform) is a strong indicator of trading.

8. Source of Finance

• If the purchase of an asset was financed by borrowing that relies on the sale of the asset to repay, this indicates trade.

9. Interval of Time Between Purchase and Sale

• A short time between buying and selling an asset may indicate trading, while holding an asset for a longer period suggests investment.

Additional Notes

• Not all badges need to apply for HMRC to classify an activity as trading. Instead, they are considered collectively.

• These badges apply to a variety of activities, including property sales, online trading (e.g., eBay), and side hustles.

• If an activity is deemed to be trading, individuals or companies must declare their income and pay the appropriate taxes.

If you’re unsure whether your activities might constitute a trade, you may want to seek professional advice or contact HMRC directly.

If HMRC wants you to do a tax return that’s for them to ask, but there’s no earthly reason why they would want to for someone selling assorted 2nd hand goods that yield 1k or so in cash.

mostly right - but if HMRC think you should have told them about income or registered for a self assessment because of that income - then “you didn’t ask me too” is not a defence.

mostly right

I think you were generous with mostly in regard to the "it's up to HMRC" point so to expand not disagree....

Some events will trigger HMRC registering you automatically for self assessment others will trigger a nudge letter and some will not be visible to HMRC.

Regardless of the above people have an obligation to tell HMRC and register if they meet the criteria for self assessment and HMRC provide a handy online tool to self check.

Oh sure of course if you’re actually needing to do a self assessment then you have a responsibility but I thought we were talking about people who were just worried about being chased up for clearing out some old tat (or even for regularly swapping their bikes).

a friend of a friend got written to a few years ago from hmrc for ebay sales (circa £20k+ of sales),  he spoke to a tax accountant and was advised to plead ignorance and write a letter in reply, as opposed the hmrc options.

Which he did, stating he was selling off his old collection and didnt beleive he was trading, he stated he believed it was capital gains, (which was circa £12.3k allowance at the time).  the letter was received. So Far he has had zero response. not even acknowledged his letter.

That to me says they are snowed under and are unlikely to be bothered by a few singletrack'ers selling off a few thousand quid of gear.

another friend of a friend got reported by his bank (money laundering), selling rings and diamonds, he was actually buying second hand then getting them polished/cleaned up and shipping them to antwerp to get authenticated. HMRC investigated, he got an accountant and they cut a deal £70k tax bill, investigation took 30 months ..

That to me says they are snowed under and are unlikely to be bothered by a few singletrack’ers selling off a few thousand quid of gear.

This.