Inland Revenue cracking down on traders on eBay

N9eav wrote:

It's amazing how low they stoop to get at your money!

But technically actual trading (again differentiating between those clearing out odds and ends and those buying to resell) on eBay is no different to trading in a shop and not declaring the income or claiming benefits you are not entitled to.

I am not surprised to be honest and had been waiting to see when it might happen. They cracked down on 'cash' traders a few years ago (market traders, takeaways etc), so they are at least being consistent!

eBay is probably quite an easy target because the information on what you are selling is in the public domain.

N9eav wrote:

I agree that major sellers ought to pay their do's. But how low do you go? I bought a few things to sell with my household junk. Technically I made a few quid proffit, but I am not a shop. I sell a few eggs from my gate, techinically they should get tax on my proffit. But come on we get screwed stupid with taxes in this country as it is!

Don't get me wrong, I am seriously NOT a fan of tax:rotfl:

I don't know where they would draw the line to be honest. I would imagine if you are only selling stuff and getting £50 from having paid £25, they probably won't worry. £500 paying £250? I don't know. £5000 from £2500 - I think they will be concerned at this level!

Remember as well the IR would look at taxable profits, so other expenses as well as the direct expenses would be included, i.e. the costs of keeping your hens!!

I just think it is something that people should be aware of. If you know that the IR may be looking at it, but think you don't have an issue and have decided to carry on, you are aware of the possible outcome, then that is the individual's decision to make.

FloFlo wrote:

I can't see the problem as soon as I realised that I could make money on ebay I registered as self employed and will pay tax on this years profit over my tax allowance. What I would like to know is the implications of running this from my home, I haven't included petrol costs or any percentage of internet costs because I'm not sure where I stand with insurance on the house or car if I involve them in my business paperwork. Any advice?

I am an accountant but don't specialise in tax, so this is from personal experience of having just done my H's tax return with his first year of eBay accounts.

I included a % of internet costs as without this he could not have traded.

I haven't included mileage expenses as he doesn't have a car! I would say you possibly should have car insurance that covers you for business use if you are going to claim it, but not sure how the insurance company would view it. Maybe call them and see what they say?

Re house expenses, it was easier for us as my H paid me rent, so we claimed a proportion of that (house was mine before I knew him and he pays no bills). In terms of claiming a % of house costs, I think it depends on how much you claim.

For smaller levels of income I used to claim an amount per week (i.e. £3 per week) to cover the use of their home.

I have also done it such that a room was dedicated to the business (this was true as it was changed in to an office) and claimed that % of the bills, i.e. 1 room in a 6 room house, therefore 1/6. However, I believe this can cause a problem if you sell the house as that proportion of the house then does not could as your principal private residence, therefore is subject to CGT. Although again, as I am not a specialist in tax I am willing to be persuaded by someone who is on this point!!!