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how much money can you make on ebay without paying tax?
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# 1
aimo
Old 28-12-2007, 10:23 PM
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Default how much money can you make on ebay without paying tax?

i sell some stuff on ebay, and just wondered how much money you can make without having to pay tax?
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# 2
Sugar Coated Owl
Old 28-12-2007, 10:28 PM
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Everyone has a personal allowance. I can't remember the exact amount.

Are you selling your own things or actually buying to sell?
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# 3
dipsy
Old 28-12-2007, 10:32 PM
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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
2007 1749
2008 291.99
2009 JanMasscara 7.00 Feb megcabot books x 2 20 XFactor tkts x 2 58.00 (couldn't go though as they only phoned on day :-( ) foundation 7.99
total so far for 09 92.99
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# 4
soolin
Old 28-12-2007, 10:50 PM
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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.
I'm the Board Guide for the Ebay Board , Charities Board , Dosh & Disability , Up Your Income and the Local MoneySaving-England board which means I'm a volunteer to help the boards run smoothly, and I can move posts there. However, do remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com
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# 5
motorguy
Old 28-12-2007, 11:01 PM
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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?
Regards

Paul
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# 6
aimo
Old 28-12-2007, 11:05 PM
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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?!
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# 7
soolin
Old 28-12-2007, 11:06 PM
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Quote:
Originally Posted by pgilc1 View Post
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.
I'm the Board Guide for the Ebay Board , Charities Board , Dosh & Disability , Up Your Income and the Local MoneySaving-England board which means I'm a volunteer to help the boards run smoothly, and I can move posts there. However, do remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com
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# 8
soolin
Old 28-12-2007, 11:09 PM
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Quote:
Originally Posted by aimo View Post
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-adv...&in_page_id=77
I'm the Board Guide for the Ebay Board , Charities Board , Dosh & Disability , Up Your Income and the Local MoneySaving-England board which means I'm a volunteer to help the boards run smoothly, and I can move posts there. However, do remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com
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# 9
MickKnipfler
Old 28-12-2007, 11:12 PM
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I thought the fine was 100
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# 10
meester
Old 28-12-2007, 11:34 PM
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Quote:
Originally Posted by pgilc1 View Post
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.
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# 11
motorguy
Old 29-12-2007, 12:10 AM
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Quote:
Originally Posted by meester View Post
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.
Regards

Paul

Last edited by motorguy; 29-12-2007 at 12:15 AM.
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# 12
rare_stuff
Old 29-12-2007, 12:19 AM
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Quote:
Originally Posted by MickKnipfler View Post
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!
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# 13
motorguy
Old 29-12-2007, 12:19 AM
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Quote:
Originally Posted by aimo View Post
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.
Regards

Paul
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# 14
StaffsSW
Old 29-12-2007, 12:27 AM
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You've never seen a panic like a non-tax paying Powerseller who receives a knock on the door from the Inland Revenue.....
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# 15
RFW
Old 29-12-2007, 12:31 AM
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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!
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# 16
MickKnipfler
Old 29-12-2007, 9:54 AM
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Someone told me that the fine for not registering was also 100
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# 17
windswept
Old 29-12-2007, 9:55 AM
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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.
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.
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# 18
motorguy
Old 29-12-2007, 10:01 AM
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Quote:
Originally Posted by windswept View Post
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.
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.
Regards

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# 19
rare_stuff
Old 29-12-2007, 1:00 PM
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Quote:
Originally Posted by MickKnipfler View Post
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!
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# 20
MickKnipfler
Old 29-12-2007, 6:06 PM
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Quote:
Originally Posted by rare_stuff View Post
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 register
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