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From today eBay will be telling HMRC about sold items. That could mount up. The allowance of £1000 could easily be broken.
I understood the “£1000” to be profit made?
So if you sell a bike for say £1200 and the tax man asked for details, would you be required to provide original receipts? Sorry if I sound a bit dim?
Seems fair enough to me, just need to tighten up on Amazon and Starbucks etc
Yeah, my understanding is that tax is on profit.
*Laughs in second hand bike market*
That said, if I buy a new bike in early April, ride it for 11 months, then sell it for the inevitable loss, can I claim the tax back against my PAYE earnings?
Everyone has a trading allowance each tax year, which means they can earn up to £1,000 without paying tax.
from the article. I gave sold £4K of stuff this year on eBay - but probably made a slight loss on it.
Then you could look at expenses, your time etc.
You've got to wonder how they will police this for the likes of us
You’ve got to wonder how they will police this for the likes of us
I imagine they won’t. It will be folk who are turning over 10’s of thousands, but not declaring anything.
A man on the radio this morning said it was gross income that would raise their interest, it would then be up to you show how you get to your net income. But also they'll be focussing on regular sellers, not people who have cleared out their garage etc and sold a load of stuff. It's small traders they're interested in.
We already target amateur "traders" using eBay, I don't think unloading a couple of old bikes will attract attention.
Amazon and Starbucks are issues for the fools that want legislation to have loopholes. I hope one of the big hitters on Britains rich list has enjoyed their Christmas, as I'm back at work on 8th January....
"HMRC says people selling off clothes or items that they originally bought at a higher price will not be liable for tax on that income."
Makes sense but if I have to prove it for everything I have sold it is going to be a complete pain in the arse. I sell over £1,000 worth every year but it is all stuff in the above category but guess this has just made filling my self assessment in a much bigger task now.
Kerley remember it's the £1000 profit not value/turnover.
I can see this being something that's needed in a small number of cases but how about instead tightening up the royal piss take taxation system for self employed limited company "contractors" and their "Director" spouses and the real big earners who can use self assessment to pay a fraction of the tax I do as an employed person instead huh?
I was concerned after selling t shirts and stickers from my online shop but when I checked I've actually taken <£400 in the tax period. minus the costs of buying, website and postage so the £1000 threshold is a long way off.
Similarly if you sell a pair of say jeans for £30 on eBay but they originally cost £100 then you've technically made a loss so that doesn't count towards the threshold
I think the idea of declaring everything we do on eBay to the tax man is great for us. If people are selling stuff they are making a loss on then they should be able to offset that against tax, as mentioned above. Let's game the system and never throw anything away but sell it on eBay for 1p.
Worn out mech? 1p on EBay so ££ loss written off against tax.
Worn out tyre? 1p on EBay so ££ loss written off against tax.
Worn out chain? 1p on EBay so ££ loss written off against tax.
Worn out xxxx? 1p on EBay so ££ loss written off against tax.
I reckon if you try you could probable find a few thousands worth of rubbish to sell that will come off your tax bill, effectively giving you either 25% or 40% extra cash back.
Similarly if you sell a pair of say jeans for £30 on eBay but they originally cost £100 then you’ve technically made a loss so that doesn’t count towards the threshold
In the words of the great Tim Nice but Dim “Buy high , sell low” 😂
Kerley remember it’s the £1000 profit not value/turnover.
So how are eBay or HMRC going to know if it is profit? Lets say I sell £5,000 of used stuff in a year for which not 1 penny is profit - it still looks like £5,000 of potential profit doesn't it.
Will the burden be on me to prove that it is not profit?
Will the burden be on me to prove that it is not profit?
Sounds pretty similar to how self assessment works. It's up to you to determine the values to enter on your tax return and to be able to justify them if questioned.
So how are eBay or HMRC going to know if it is profit? Lets say I sell £5,000 of used stuff in a year for which not 1 penny is profit – it still looks like £5,000 of potential profit doesn’t it.
Will the burden be on me to prove that it is not profit?
I suspect they're more interested in those retailing thousands of phone chargers, hover boards, electric scooters, etc. Not people having a garage clear-out or selling their car. Same with car selling, there's nothing top stop you selling your car for whatever it's worth, HMRC only care if you're selling for a profit.
WorldClassAccident
Free Member
I think the idea of declaring everything we do on eBay to the tax man is great for us. If people are selling stuff they are making a loss on then they should be able to offset that against tax, as mentioned above. Let’s game the system and never throw anything away but sell it on eBay for 1p.Worn out mech? 1p on EBay so ££ loss written off against tax.
Worn out tyre? 1p on EBay so ££ loss written off against tax.
Worn out chain? 1p on EBay so ££ loss written off against tax.
Worn out xxxx? 1p on EBay so ££ loss written off against tax.
To make that work you'd need to somehow define them as a company asset, and then pay benefit in kind on the value you had from them. HMRC would get it's pound of flash don't worry. Unless you register the bike as being owned by a trust on the IoM, lease it off That's all alright.
Facebook marketplace or singletrack/pinkbike classifieds and don't buy and sell so much stuff might be the answer 😜
We already target amateur “traders” using eBay, I don’t think unloading a couple of old bikes will attract attention.
...and ignore the really big players and non-doms?
No wonder you don't have capacity to answer the phones when your time is spent picking peanuts out of poo.
how about instead tightening up the royal piss take taxation system for self employed limited company “contractors” and their “Director” spouses and the real big earners who can use self assessment to pay a fraction of the tax I do as an employed person instead huh?
If legislation needs changing, think about who you vote for.
If you have suspicions/evidence of anyone breaking the rules, there's a hotline to call.
Sounds pretty similar to how self assessment works. It’s up to you to determine the values to enter on your tax return and to be able to justify them if questioned.
I haven't spotted a "profits from sales" type section before as guessing I just skipped over it so I will be able to continue skipping over it by the sound of it then and if HMRC ever ask "what about this £5,000" from eBay I can safely justify as personal used items sold for less than purchased.
Let's hope that is enough and I don't have to trawl through receipts of purchases and link to any sales to evidence no profit involved.
I was concerned after selling t shirts and stickers from my online shop but when I checked I’ve actually taken <£400 in the tax period. minus the costs of buying, website and postage so the £1000 threshold is a long way off.
Is that a hobby or declared? If not declared it needs to be if your turnover exceeds £1000 (see trading allowance).
Not an accountant, missus is a bookkeeper for people doing exactly this.
I haven’t spotted a “profits from sales” type section before as guessing I just skipped over it
Is it not in the same category as interest on savings and capital gains?
I think there will be quite a few that fall into this side hustle bracket. Wife sold a load of the kids old clothes that for some reason we'd kept in the loft for years and rather than mess about selling each individually and dealing with wrapping, postage, etc., bundled then together into 10's and 20's of similar size and so on. Time poor, etc...
These were snapped up and then pretty sure they were being readvertised by someone who does have the time / willing to do it, and by splitting out probably made 4-5x the value out of them. Of course once you consider time and ancillaries that's not all profit but you can easily see how they can easily run into £1000 of gross profit (eg: bought bundle for £40, sold items for £200 total) if they do that regularly.
Another one would probably be records with the increase in vinyl interest - find a couple of decent value items in a boxload at a car boot sale, etc.
Half of me says fair play to them for trying to deal with the CoL crisis by putting some effort in where we couldn't be arsed, half of me wonders where it is no different to being an importer and reseller where you absolutely would see tax being due.
Similarly if you sell a pair of say jeans for £30 on eBay but they originally cost £100 then you’ve technically made a loss so that doesn’t count towards the threshold
Your own clothes aren't trading stock unless you take a sexy picture of yourself wearing them and sell them unwashed for £200 - then you've made profit. 🙂
Selling your old clothes or bike parts is irrelevant to all this - selling your old, used stuff will always yield less than you've spent but your not in the business of of buying and selling cloths or bikes so the cost of purchase isn't a factor. If HRMC ever had cause to look that would be obvious. Thats not a trading income becuase you're not adding value to anything - you might make losses on individual transactions but you'd be at least seeking to make a profit broadly. If we you were selling old pairs of jeans every week - in more sizes and styles than would fit you its a safe bet you'd be selling them for more than they cost you and that would warrant a bit of investigation.
Similarly if you sell your car on ebay it'll likely be for more than £1k but that obviously isn't an issue - but again if you sell a second hand car every week something else is going on.
Martin Lewis did a think on this on Five Live a while back
Apparently the main target of this is people who are effectively traders but who are also claiming benefits at the same time
Sounds to me like a ‘squirrel!!!” type distraction from the real tax dodgers and I’m sure we’ll soon see them make an example of a few poor saps. Going after the big boys is too much trouble snd might actually involve some effort, so we’ll hassle some little people, just trying to get by instead
Enforcing this on any kind of scale would be pretty much impossible, even before you take into account that HMRC is the most incompetent organisation in the world. Some cynics might say deliberately so.
Yes, that all seems fairly simple and I hope eBay reporting and HMRC calculation logic never highlights me selling over £1000 of stuff in a years period and questions why I have not declared anything on my self assessment.
It's people running businesses (even small businesses, once you go over 1000UKP). Nothing to worry about for normal 2nd hand sales, unless you are at the level of a trader buying and selling stuff for profit. People running side hustles and cottage industries will be caught (assuming the reporting works etc).
Okay, I will point them your way if they question my amount of not profitable sales as I don't trust any logic being applied. For example if I sell 10 bike related items in 12 months that total £2000 would any intelligent reporting see that as someone who buys a lot of personal use bike stuff and then sells it or would it look like I am a small trader of bike stuff?
There is (unsurprisingly) a quite Orwellian/authoritian side to this as the government are now trying to pass a bill allowing HMRC to access the bank accounts of anyone in receipt of state benefits, which includes pensions
I’m pretty sure that that’ll be the thin end of wedge, if they get it through, and they’ll soon be demanding access to everyone’s bank account, using a few people making a few quid on eBay as the justification
It's not just ebay, it seems to be a variety of online income streams (including Airbnb), there's an article up on the BBC Business website - https://www.bbc.co.uk/news/business-67855872
Just out of interest, presumably the £1000 limit is the total across all platforms (ebay sales, Vinted sales, Youtube income etc.) rather than £1000 per platform?
for the comment about pink bike etc, paypal is becoming a UK company early Jan 2024, and they have amended terms and conditions
Amendments to the PayPal User Agreement<br style="box-sizing: inherit; line-height: 1.6;" />Effective 16 January 2024:
<ul style="box-sizing: inherit; padding-left: 0px; margin: 0px 0px 1rem 2rem; line-height: 1.6; font-family: pp-sans-small-regular, 'Helvetica Neue', Arial, sans-serif; font-size: 17.5px;">
<li style="box-sizing: inherit; line-height: 1.6; text-align: left; font-size: 1.25rem; margin-top: 1rem;">We are clarifying that fees payable to PayPal do not include taxes and that it is the responsibility of our customers to assess, collect, report and remit taxes to the appropriate authorities. We are also asking our customers to acknowledge that PayPal has an obligation to make reports to tax authorities regarding transactions that we process.
a friend of a friend got a HMRC letter early last year for online sales tax year 22/23. he wrote back to them, and is yet to hear anything, from reading tax info online, last year they went for sellers who went over the income £12,570 threshold, and sent out 30-40k letters.
if they are looking at tax dodgers i've never understood why council tax forms do not include a tickbox saying you are the home owner/mortgagee, so they can go after the income of those who rent out a second house
and ignore the really big players and non-doms?<br /><br />
in fairness to those who work for HMRC this is becuase its legislation that needs changing to allow HMRC to go after these people
a friend of a friend got a HMRC letter early last year for online sales tax year 22/23. he wrote back to them, and is yet to hear anything, from reading tax info online, last year they went for sellers who went over the income £12,570 threshold, and sent out 30-40k letters.
Hmm be interesting to see if I get one, sold around that amount on eBay in the first 6 months of last year clearing all the contents of my mates house. Loads of hifi, guitar and gaming equipment.
It's quite a long article, but for the TLDRers, this sentence near the end seems all the reassurance that is needed.
HMRC says people selling off clothes or items that they originally bought at a higher price will not be liable for tax on that income.
The expression that you were looking for is 'under-resourced'.
Don't knock the people, direct your ire towards the political decision makers. It is they who decide to reduce resources in the organisation whilst at the same time, making the legislation complex and full of deliberate holes to allow pathways for abuse by the well resourced wealthy.
Meantime, the whole point of the trawl for data from the selling platforms is to trace those with a significant trade, who should already be self assessing their profits.
The key word is 'trade'. It's a concept well defined in legislation and caselaw and isn't going to catch incidental profits from selling your own stuff. Equally, losses from selling can only be used to offset a tax liability elsewhere in your life, if they arose from a trade. Where a cornerstone is evidence of an intent to make profits...
Definitely going to affect those with a 'side hustle' - my niece sells hand made items via etsy and even calls it 'her little business', but I'm darn well sure she's claiming benefits and not declaring the business income. It's not that she makes much anyway by the time you factor in 'time' it takes to create the 'items' - she does it to get a bit of extra money but selling an item for say £10, certainly takes longer than an hour to make.
Could be a headache for people like this then having to account for time and material cost.
It’s quite a long article, but for the TLDRers, this sentence near the end seems all the reassurance that is needed.
It doesn't give me any reassurance as again how will HMRC know if my sales are from items I bought at a higher price. Yes, I won't technically be liable for tax but will I have to prove anything?
For example if I sell 10 bike related items in 12 months that total £2000 would any intelligent reporting see that as someone who buys a lot of personal use bike stuff and then sells it or would it look like I am a small trader of bike stuff?
Did you make >£1000 profit on it?
If yes, then yes.
If no, then no.
Seems fairly straightforward to sort out even if you do get caught in a very broad net?
The only opaque bit seems to be how would you define/spot the difference between a "trader" doing badly, and your average cyclist or other hobbyist. If I did sell something at a profit (occasionally happens, although not to the tune of £1k/year ), does that get offset against something else sold at a loss? Or would they treat profits as a trading and losses as a hobby.
e.g. If I stick 12 decent pics in a calendar on Etsy, does that then mean my camera gear is a "business". In which case can I get all that equipment offset against my PAYE?
The only opaque bit seems to be how would you define/spot the difference between a “trader” doing badly, and your average cyclist or other hobbyist.
Yes, the bit I am questioning and not very straight forward at all is it. I had a light year on eBay in 2023 and sold 67 items totaling £2067.
Do I appear to be a trader?
If so do I have to evidence to HMRC that the 67 items were all sold for less than I paid and if I can't then pay £600 in tax in the above £1000 'earnings'
You can see why that might be a bit of a pain in the arse can't you?
Only if you are subject to an Enquiry into your self assessment tax return. Or your lack of having sent in a tax return.
Remember, the data will have to be risk assessed and HMRC will be most interested in higher yielding examples.
For indication of how the system works, Google 'Badges of trade'. There's loads of advice on line and the HMRC website has lots of useful guidance.
and remember folks if you buy a new bike and strip the parts to sell off as new, and you hit the £1k , then it'll be taxable, even though you have essentially paid more to upgrades.
best to use them once and sell off as used.
i've seen an awful lot of people selling items marked as used, when they clearly look new.
i downloaded and checked my ebay sales last year, you'd think item condition would be in the download, its not, that would make it far simpler for HMRC , persons selling only New items are clearly trading.
Yes, the bit I am questioning and not very straight forward at all is it. I had a light year on eBay in 2023 and sold 67 items totaling £2067.
Do I appear to be a trader?
Well, If you do, them I'm truly screwed - 121 items - £14.7k....oops.
The expression that you were looking for is ‘under-resourced’.
Don’t knock the people, direct your ire towards the political decision makers. It is they who decide to reduce resources in the organisation whilst at the same time, making the legislation complex and full of deliberate holes to allow pathways for abuse by the well resourced wealthy.
I’m well aware where the blame lies. Wasnt it George Osbourne who slashed HMRCs resources as virtually the first thing he did? Deliberately hobbling them? And that’s before we get into the revolving door between HMRC and the big accountancy firms
That’s why it seems bonkers that they’re now using what meagre resources they have on chasing people selling stuff on eBay? How much is that going to bring in for the exchequer? I’m guessing pretty much nothing.
Meanwhile that’s even less resources to chase the proper tax dodgers. Absolutely typical for this lot
Remember, the data will have to be risk assessed and HMRC will be most interested in higher yielding examples.
Thanks, that makes sense. I hate self assessment/tax stuff so possibly over reacting!
another reason not to use ebay to sell stuff then. Its completely unforceable for 'normal' people who are just moving on second hand stuff.
i suspect they are not really interested in those who genuinely clear out a garage or sell off the remnants of a hobby, but those who are patently selling off stuff they have bought in an attempt to make a profit - those using it as a side hustle right up to businesses using eBay as another route to market. it's probably a bit like the capital gains regime where irregular disposal of items such a car is of little interest (even at a profit), but a pattern of regularly buying and selling assets is obviously trading.
That’s why it seems bonkers that they’re now using what meagre resources they have on chasing people selling stuff on eBay? How much is that going to bring in for the exchequer? I’m guessing pretty much nothing.
The threat alone will bring in some additional revenue. No additional work needed.
Well, If you do, them I’m truly screwed – 121 items – £14.7k….oops.
£14.7k in sales is trading in my book.
Definitely going to affect those with a ‘side hustle’ – my niece sells hand made items via etsy and even calls it ‘her little business’, but I’m darn well sure she’s claiming benefits and not declaring the business income.
So arguably she'll be undercutting those who do do it properly then and taking money out of the system as well.
If our taxes were spent wisely I'd be outraged, but they're not. So, meh!
Whatever happens - it'll be bonanza time for car-boot sales. Loads of untraceable cash payments for the win! 🙂
e.g. If I stick 12 decent pics in a calendar on Etsy, does that then mean my camera gear is a “business”. In which case can I get all that equipment offset against my PAYE?
Your camera kit can be offset against the business profits from the calendar business, not your PAYE.
Wonder how this applies to cars. Admittedly a small group but the car I bought for 10k 15 years ago is now worth £20k. If I sold it would there be tax due on the 10k uplift (not profit due to cost of ownership)?
Cars, however, are exempt from Capital Gains Tax, as they are considered a 'wasted asset'. This means they are viewed by HMRC as having a “predictable life which does not exceed 50 years”, while also being “likely to become less valuable” over time.
Your camera kit can be offset against the business profits from the calendar business, not your PAYE.
What if my PAYE job is as a cameraman?
£14.7k in sales is trading in my book.
And yet you've made that judgement based on sweet FA knowledge over what was sold.
if however you were regularly buying and selling cars you are then deemed to be in business and that CGT issue becomes a trading profit and will be of interest. if you have had just the one or two cars (and your period of ownership is as extended as you state) then you've the taxman should view it as you've just been lucky and not be bothered.
Most people don’t have £14.7k’s worth of old stuff lying around.
Which was my point. As £14.7K seems a lot then HRMC could go after it. Evidencing that all 121 items sold were indeed personal items previously purchased (maybe many years ago) and then sold at a loss will be a lot of fun.
Will the burden be on me to prove that it is not profit?
Always.
Which was my point. As £14.7K seems a lot then HRMC could go after it. Evidencing that all 121 items sold were indeed personal items previously purchased (maybe many years ago) and then sold at a loss will be a lot of fun.
Precisely:
My 2018 Stache was broken down and sold for £3.3k, my 2016 Yeti was broken down and sold for £2.9k. Two additional wheelsets for the two bikes were sold for £1.8k, I sold some old action figures I'd bought in my teens and that had been sitting in my parents loft £1.1k. I sold an iPad pro and my less than 6m old laptop as I'd been given one by work £2.7k. Kids bikes *2 (£1.05k), Xbox, PS4, general stuff, etc. Everything was sold at a loss and heck, most of it was bought SH to begin with. How do you prove it?
4 bikes were turned into 4 bikes. 2 wheelsets were turned into 3 wheelsets, the consoles made A single console XBoxX. The laptop and ipad money went into paying off the debt I'd incurred in buying the laptop in the first place.
Most people don’t have £14.7k’s worth of old stuff lying around.
Many of us with multiple bikes would easily get to many thousand if we're selling stuff to buy new stuff.
All sounds like stuff where you can identify the original purchase easily enough (given that many will have email receipts I suspect)... quick, short easy chat with the HRMC there... not that they'll bother... that still doesn't look like a business (yes, some micro businesses will turn over that kind on amount on ebay, but a quick look at what is sold, rather than than total value, would mark then out as traders... your history would not).
This whole thing sounds about as well-thought-through, practical and workable as their Rwanda policy
Yep, you've still the receipts for those action figures you bought in your teens haven't you?
I am very bad at keeping receipts and I tend to buy complete used bikes and then over a year change almost everything so would not have receipts for each part and explaining that the sold item was from complete bike etc,.
Ultimately it would be difficult to explain/prove so it would end up on my tax bill. I am typically much lower the £14K in a year and have only sold ~£50K in total on eBay in 20 years so should be under the radar.
Does the £1k include any money made from savings interest?
Or is it a separate £1k allowance.
Many of us with multiple bikes would easily get to many thousand if we’re selling stuff to buy new stuff.
I think you are proving their point there.
Its going to depend on implementation but overall seems a reasonable starting point.
In theory these rules always applied but as the information wasnt shared HMRC couldnt enforce it.
Now with the information sharing they can.
Sadly it will be down to how its implemented but allowing them to have a quick look and go "hmmmm" this account has had 10000 sales and made this much lets have a quick look to see whether it looks a bit businessy seems to make sense to me.
Hopefully it will get some of those dropshipper idiots who clog up all the searches.
I have a sense that people are just looking for chances to moan at HMRC (usually fair game TBH) when the reality is that this is only a slightly changed emphasis.
HMRC has always had the ability to request this info from UK companies, but because many of the actual websites are overseas, that isn't possible for all. Now there's a global OECD initiative to share the data, and further to make it that rather than 'on request' they're being asked to flag volume and value users. That's not the same as 'everyone over £1000' - that's something that has been jumped on as being assumed to be the threshold that will trigger reporting. IDK what the threshold is or will be, it'll come in in a year's time and I suspect will be quite a bit higher if they want to be able to follow them up. But maybe they will flag all with substantial turnover and transactions with a 'reminder' that they need to ensure they're under the threshold OR including it on SA, and then focus at a second level. I don't see any issue with that?
The £1000 is a true threshold for reporting though..... anyone *making* more than £1000 should be declaring it anyway, via normal SA tax. If you aren't then you are not declaring earnings truthfully and might not be paying the right tax. That's not HMRC being draconian, it's a fact, and responsibility lies on the individual to support their tax return numbers. Doesn't mean that above £1000 in earnings you will pay tax, you'll still have your own allowance, etc. The £1000 is available to all 'free' for hobby selling, no matter how much you make in your main job or not (which you should be paying proper tax on anyway)
Meh predicted this years ago on this very forum. All the tax clamp downs (trades, small businesses etc) will be on the little people while the American corporations crack on business as usual. What a shocker eh!
They always punch down and start at bottom, while trivialising the amounts of money when it's rich people and making a massive deal over much smaller amounts when it's dirty little plebs at it.
IDK what the threshold is or will be, it’ll come in in a year’s time and I suspect will be quite a bit higher if they want to be able to follow them up
BBC article lists one of the websites saying they only need to report those with greater than 30 transactions a year or whatever 2000 dollars will exchange to so increases it a fair amount to begin with.
Then I would guess HMRC might start looking with interest at anyone with triple figure transactions or five figure sales.
The 1k has nothing to do with savings interest, it's a threshold before any trading is considered enough of a business rather than hobby that it's worth taxing.
Apparently it's also a threshold for turnover rather than profit, which I had forgotten. But the tax paid is only on the profit. People selling 14k of bike parts per year probably need to keep proper records but may not actually end up paying much tax.
@trailseeker, bank interest is seperate, and for paye employees your tax code will be amended.
High rate taxpayers will pay income tax @ 40% on anything over £500
Basic rate 20% taxpayers will pay on interest over £1k.
note personal income tax levels are frozen for the next 5 years and current allowances are diminishing..
capital gains tax [£6k, £3k next tax year] // dividend income [£1k, £500 next tax year] // savings interest have all lowered in recent years
Vinted is going to be fun to fill out any paperwork, I've just checked what you can download, i'm still well with £1k, but it seems they don't even have the item name in the downloads.
the records only contain TransactionID / Date / £value
sold lots of old mtb gear and a few new items, that i'd never worn. would i be expected to match up each transaction with the item and the cost on new stuff i've sold.
Think people here are confusing what qualifies for income tax eg Trading parts for profit & what is Capital gains eg Selling off a bike collection.
HMRC Rules are pretty simple to follow on Trading. Register if Turnover > than £1k. Complete self assessment. Income tax on any net profit depending on whether allowance is used up by other earnings eg PAYE, Pensions etc
When I was PAYE and just doing a bit of trading to pay for my silly expensive bike habit I didnt bother. Now I am taking a pension and doing a bit more to cover cost of living increases I have registered as a sole trader and am doing a self assessment.
I have always kept a simple spreadsheet cash book of sales & purchases so accurate self assessment pretty straight forward.
sold lots of old mtb gear and a few new items, that i’d never worn. would i be expected to match up each transaction with the item and the cost on new stuff i’ve sold.
https://www.gov.uk/simpler-income-tax-cash-basis is pretty simple
Vinted is going to be fun to fill out any paperwork, I’ve just checked what you can download, i’m still well with £1k, but it seems they don’t even have the item name in the downloads.
the records only contain TransactionID / Date / £value
sold lots of old mtb gear and a few new items, that i’d never worn. would i be expected to match up each transaction with the item and the cost on new stuff i’ve sold.
As per the multiple articles and posts on here, the reporting by these cos doesn't start until Jan 25 so they will I suspect have it all done by then.
But yes, if you have a 'small business' buying and selling bits and bobs at a level likely to interest HMRC then yes, it is on you to keep records so you can ensure you are paying the right amount of tax.
Seems fair enough to me, just need to tighten up on Amazon and Starbucks etc
Or indeed eBay who seem to be a bit averse to paying HMRC in full themselves...
thanks @theotherjonV
@cookeaa ebay will no doubt be getting a few percent kickback for implementing this scheme
i also noticed recently when buying from USA sellers ebay now add 20% VAT onto your winning bid..
Enforcing this on any kind of scale would be pretty much impossible, even before you take into account that HMRC is the most incompetent organisation in the world. Some cynics might say deliberately so.
Oi, I resemble that remark.
We do data sweeps like this at various "risk categories" all the time. It gets risk assessed, and then a few thousand letters go out, a few people own up, a few get caught, we move on.
All the time the proper experts are quietly pursuing all those big fish we like to moan about "getting away with it", and those cases can take years to reach the evidence threshold.
Before you criticise HMRC, bear in mind the government recently refused to tell the Public Accounts Committee what our resourcing requirements were to properly close the tax gap.
And while the tax gap appears huge at several billion pounds, it's about 5% of tax due. Which means that despite our problems, we do get 95% of tax owed.
... actually I've deleted that link as it seems unlikely
"Did you make >£1000 profit on it?
If yes, then yes.
If no, then no.
Seems fairly straightforward to sort out even if you do get caught in a very broad net?"
No it won't be.
"Could be a headache for people like this then having to account for time and material cost."
yes it will be
It's not as straightforward as our revenue chap insists - but then he would say that. I mean it is if you have an accountant obviously.
What it will do is drag thousands more into self assessment for basically no reason at all and for many that will be a right PITA. We've already seen this with the child benefit clawback and it caught many people out, some ending up with huge fines for incorrect self assessments which were made by accident.
Typical tory - go after the little people with a big stick whilst offering carrots (tax deals) to the real criminals. God I hate them.
If I understand correctly the £1000 allowance only applies to trading, ie, not to normal person "selling some stuff" but only to intentional profitmaking stuff. So if you, frinstance, buy a bike for yourself, don't like it, and sell it then that doesn't qualify, but if you buy a bike to sell and then sell it, it does.
Of course there's no practical way to distinguish the two but it adds to the whole general mess of the situation. My own approach is to assume it'll never be a problem for me as I'm not selling enough, but you never know, the tory way is to go after the little guy who can't afford lawyers after all.
is to go after the little guy who can’t afford lawyers after all.
Probably more a case that people with a "Wee side hustle" are less likely to be switched on to the rules
eg
they really will only go after those setting out to trade to make a profit. if, for example, they started chasing anyone who had sold a bike they didn't get on with they are going to have to start to allow for losses too and the economics of that will go badly wrong.