how much money can you make on ebay without paying tax?
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MickKnipfler wrote: »I thought the fine was £100
That's the fine for submitting a late tax return. The fine for not registering as a self-employed trader can be a lot higher, especially if you get discovered by the tax-man rather than just confessing ignorance and registering late.
The issue isn't about profit as far as the tax man is concerned it's about trading, or buying with the intention of selling for a profit. They have some rather clever automated software crawling ebay pulling details of all powersellers and people with high feedback scores and comparing the registered details of the account holder with their tax records. Ebay is fully co-operating with the inland revenue on this and will hand over any records the taxman wants to see.
The accountancy world is already very aware of this and the first prosecutions are underway but it's likely to be a few months before any prosecutions are concluded and gain any publicity.
Sorry to be scary, but people should be aware of this if they intend to make money on ebay or amazon by buying items to sell for a profit. The keeping of accounts is a simple process and the tax office will help you fill in the forms, though an accountant may actually help more and save you money.
This topic really should be a sticky!Do You Twitter?
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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?!
Also, the taxman can go back historically (or hysterically?) and tax you on what he thinks you have made, not necessarily on what you have evidence you have made.
And ebay keep a record of all transactions made, so someday the taxman 'could' ask for a breakdown of say those ebayers who sell more than £200 a month of new items, and ebay would be in a position to do so. Whether or not they will ever do so is another matter. You're more likely to be shopped by someone, say another ebayer or a 'friend', but that may change.0 -
You've never seen a panic like a non-tax paying Powerseller who receives a knock on the door from the Inland Revenue.....<--- Nothing to see here - move along --->0
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If you want this kind of advice, the best people to ask are HMRC, they have a website and a helpline. They are easy to talk to and happy to help, you only have to give them the information you wish to. Honesty is generally the best policy!
You can also find accountants who offer free or low priced initial consultations.
Whilst advice you get on here may often be correct, when it comes to tax it isn't the best place to ask. It doesn't stand up in court as a defence "Well I did ask on an internet chat room"!
When it comes to fines, it depends on the offence. They can charge standard fines as well as interest, back interest and court proceedings (plus charges), they have powers that can result in imprisonment as well as being able to freeze your assets. They aren't worth crossing!.0 -
Someone told me that the fine for not registering was also £1000
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Just where is the great tax evader these days? It's been so long I can't remember his name! I belive his initials were SC.:p
Bottom line is, if you buy goods to sell for profit, whether second hand or new - you are liable for tax on that profit - the trick is to (lawfully) minimize your taxable profit in the eyes of hmrc."There is a light that never goes out"0 -
Just where is the great tax evader these days? It's been so long I can't remember his name! I belive his initials were SC.:p
Bottom line is, if you buy goods to sell for profit, whether second hand or new - you are liable for tax on that profit - the trick is to (lawfully) minimize your taxable profit in the eyes of hmrc.
Maybe things got out of Control and hes having a Snooze at HMRC's pleasure.
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MickKnipfler wrote: »Someone told me that the fine for not registering was also £100
Someone? Well that's hardly likely to stand up in a court of law when HMRC fine you and add interest, calculated tax (their calculations), costs and other sundry amounts.
Someone told me down the pub that I don't have to pay tax if my initials are HMRC, but I think they'd been drinking.
£100 is the amount fined for filing a late return, not for a late registration, even if it is the amount for a late registration it is a lot less than would be charged if they came knocking on your door wanting to know why you aren't registered and with a folder full of details of your ebay sales!Do You Twitter?
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rare_stuff wrote: »Someone? Well that's hardly likely to stand up in a court of law when HMRC fine you and add interest, calculated tax (their calculations), costs and other sundry amounts.
Someone told me down the pub that I don't have to pay tax if my initials are HMRC, but I think they'd been drinking.
£100 is the amount fined for filing a late return, not for a late registration, even if it is the amount for a late registration it is a lot less than would be charged if they came knocking on your door wanting to know why you aren't registered and with a folder full of details of your ebay sales!
That's a bit abrasive mate. I was only giving information that I had heard. I didn't state is as fact or suggest it would stand up as any kind of defense. If it's different to £100 then I will stand corrected. Neither am I suggesting that people shouldn't register0 -
A simple reference to how much you can make on eBay and the rules to be complied with.
http://cgi3.ebay.co.uk/ws/eBayISAPI.dll?ViewUserPage&userid=talkinpeaceCounting the beans : £1
Knowing which beans to count : £990
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