Do I have to pay tax on my eBay sales? Question of the week discussion

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  • RFW
    RFW Posts: 10,009
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    Muffy0 wrote: »
    So where do I stand as someone who sells a lot competition wins - all brand new items. Are tehy my personal items as I haven't actually purchased them - therefore I don't have to inform the tax people?

    Not my field of knowledge but as I understand it certain wins are classed as taxable and some aren't. You would need clarification from HMRC.

    I'm sure there is a block on a possible loophole of people claiming all the stuff they sell are prizes from a competition set up by their brother or sister!
    .
  • jenniewb
    jenniewb Posts: 12,836
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    Wow- am bit concerned but a bit relieved- I doubt I scratch upto more then £100 on ebay- in a whole year- and thats likely to be a one off (I gained weight and had to sell swap or throw away my entire wardrobe- even the socks!) I made £100 about 2 years ago, I was in a minimum wage job and needed the cash for food! I doubt I will get that again, but the tax and etc does put me off selling on ebay (as well as ebay fees and bad buyers...).

    Is there a threshold you don't need to report on? or is everything over 1p liable to pay 15% tax?
  • amcluesent
    amcluesent Posts: 9,425 Forumite
    >Is there a threshold you don't need to report on? or is everything over 1p liable to pay 15% tax?<

    There's no threshold, you are either trading or not. And if you are trading, then sales income is added to other earning and taxed after your usual personal allowances, plus you can offset business costs.
  • rarrarrar
    rarrarrar Posts: 142
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    The HMRC document is very readable and most people will have no problem deciding their status; even then buying and selling the odd (moderate value) item every month is unlikely to be noticed.
    The address requirement (EU law) is frequently flouted and not just on Ebay with many of the domain names being also registered as a "private individual" with details withheld.
    Sorry , of course DSR doesnt apply to genuine "auction items".
  • ever so slightly off topic...

    i am an ebay trading assistant, so i sell other peoples items.

    am in still liable for vat once my turnover goes over the threshold ? or am i just charging for a service ?

    a lot of the stuff i am selling is for a business client, so mostly brand new. but none of its actually mine, just the money comes through me and i take my cut.

    i get different answers every time i ask hmrc !
    :grouphug:

    no wonder he has a smile on his face...
  • RFW
    RFW Posts: 10,009
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    ever so slightly off topic...

    i am an ebay trading assistant, so i sell other peoples items.

    am in still liable for vat once my turnover goes over the threshold ? or am i just charging for a service ?

    a lot of the stuff i am selling is for a business client, so mostly brand new. but none of its actually mine, just the money comes through me and i take my cut.

    i get different answers every time i ask hmrc !
    From my auction house days, you need to be VAT registered if the money you take in goes over the threshold, you are in effect buying all the goods you sell.
    For example if you sell something for £100 and take 10% commission, it is exactly the same as you buying an item for £90 and selling it for £100, your turnover in that instance is not £10 but £100.
    .
  • okay, thanks for that.

    i am going to be borderline threshold so i may be okay anyway, but always helps to know what to expect.
    :grouphug:

    no wonder he has a smile on his face...
  • StaffsSW
    StaffsSW Posts: 5,788
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    ever so slightly off topic...

    i am an ebay trading assistant, so i sell other peoples items.

    am in still liable for vat once my turnover goes over the threshold ? or am i just charging for a service ?

    a lot of the stuff i am selling is for a business client, so mostly brand new. but none of its actually mine, just the money comes through me and i take my cut.

    i get different answers every time i ask hmrc !

    This question was asked elsewhere, and after some research and advice, it comes down to who receives the money for the sale (regardless of ownership/title of the goods) - do you take it, then pass it back to your customer less your share, or does the buyer pay your customer direct, then you receive a separate payment?

    If it is the latter, then your earnings are simply the commission you charge, but if the eBay buyer sends money to you, and then you pass it on less commission to your customer, then the total amount received by you is counted towards the VAT limit.

    To be honest though, if you are getting to that sort of turnover, it is probably better to seek help from an accountant - you have quite a unique situation, and it's unlikely that you could get a definitive answer from anyone of us on here.
    <--- Nothing to see here - move along --->
  • cheers for that. its certainly baffles them at hmrc when i phone them !

    i could quite easily set it up differently so i was just being paid my commission.

    as i will be quite close to the threshold this sounds like a plan.
    :grouphug:

    no wonder he has a smile on his face...
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