how much money can you make on ebay without paying tax?

aimo · 28 December 2007 at 11:23PM

i sell some stuff on ebay, and just wondered how much money you can make without having to pay tax?

Sugar_Coated_Owl · 28 December 2007 at 11:28PM

Everyone has a personal allowance. I can't remember the exact amount.

Are you selling your own things or actually buying to sell?

dipsy · 28 December 2007 at 11:32PM

I would love to know this as well, if your selling your own goods on then surely no tax, but if your selling several of same item do you need to register as a business for NI straight away... is there some of guide... I guess I mean if you only sell £100 over a year - costs etc then would they still expect you to register to pay NI (and is this about £4 a week)?

Anyone know an answer to this....

I sold quite a few bits on ebay leading up to Christmas feedback 106 and over 50% of this was in the last month, rest was from selling bits and bobs I no longer needed, the bits in last month were bought to sell on and make a few quid leading up to Christmas.

Only made £200 minus cost of buying items and time etc

Would be interested to know

Thanks in advance x

soolin · 28 December 2007 at 11:50PM

One day we will have a sticky for this , until then...

As soon as you buy to sell on rather than just sell your old stuff then you must register with the tax man within 3 months. failure to register will result in a fine.

Every tax year you then submit very simple accounts, all they require is total income less expenses to give a taxable profit. That taxable profit is added onto any other taxable income you have for the same tax year to work out your tax liability. If your total income from all sources is below your personal tax allowance then there will be no tax to pay.

basically that is it. When you register you will be offered the opportunity to attend a workshop to explain more about keeping records, but they really don't want anything complicate dunless you start turning over more than about £15,000 a year in which case more detailed accounts may be required.

motorguy · 29 December 2007 at 12:01AM

Presumably that means that if you already have a job and are paying tax, then any profit you make on your ebay items, you will pay tax on that profit?

aimo · 29 December 2007 at 12:05AM

thanks! couple more questions... does anyone know how much you will be fined? and what the earnings brackets are for when you have to pay more tax? just want to work out if it is worth my while to sell on ebay or not?!

soolin · 29 December 2007 at 12:06AM

pgilc1 wrote: »

Presumably that means that if you already have a job and are paying tax, then any profit you make on your ebay items, you will pay tax on that profit?

That's correct. We all have only one personal allowance, if you are working elsewhere and pay under PAYE it is very likely that all your coding will be used against that main income leaving your ebay income taxed without any further allowances.

If however you are say, self employed and submit a tax return that calculates your total income for the year the allowance just comes off the total taxable income so you don't really see easily how it is allocated.

Likewise even pensioners and students (obvious I know but some people believe them to be taxed differently) have allowances and all taxable benefits and summer jobs etc eat into the allowance.

National Insurance is slightly different, but the tax department cana dvise about that as well.

soolin · 29 December 2007 at 12:09AM

aimo wrote: »

thanks! couple more questions... does anyone know how much you will be fined? and what the earnings brackets are for when you have to pay more tax? just want to work out if it is worth my while to sell on ebay or not?!

I've no idea what the fine is but the tax details can be found here:

http://www.thisismoney.co.uk/tax-advice/income-tax/article.html?in_article_id=418673&in_page_id=77

MickKnipfler · 29 December 2007 at 12:12AM

I thought the fine was £100

meester · 29 December 2007 at 12:34AM

pgilc1 wrote: »

Presumably that means that if you already have a job and are paying tax, then any profit you make on your ebay items, you will pay tax on that profit?

profit means you bought it for more than you paid for it. Selling on old laptop for £400 is not profit, if it cost you £1,000 3 years ago.

So you have to either be buying things to sell them on, or making them yourself for sale.

Most people are just selling personal items for less than they/someone else as a gift originally paid for them.

motorguy · 29 December 2007 at 1:10AM

meester wrote: »

profit means you bought it for more than you paid for it.

Yes that would be what most peoples definition of profit would be. :rolleyes:

I was getting Soolin to clarify the point for the benefit of those who may think otherwise that your tax threshold applies to your total income, not just your ebay one. Lots of people think making an extra £100 a month by selling, say DVDs, or maybe the odd laptop is not taxable. Not so.

But yes, selling used household items shouldnt attract the taxman.

how much money can you make on ebay without paying tax?

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