Selling, HMRC and tax?

GoodNewmover

At what point is an auction seller (eBay, Amazon, Etsy, CQOut etc) required to pay tax and or register with the HMRC? Experiences,views welcome thanks.

*Scottish*Lass*

I know that one point is: if you buy items specifically to sell them on (for profit or not).

GoodNewmover

*Scottish*Lass* wrote: »

I know that one point is if you buy items specifically to sell them on (for profit or not).

Didn't understand the sentence.

*Scottish*Lass*

If you buy things to sell them then you would have to declare it to HMRC.
If you buy something, wear it/use it THEN sell it it doesn't count.

Is that any better? lol

GoodNewmover

*Scottish*Lass* wrote: »

If you buy things to sell them then you would have to declare it to HMRC.
If you buy something, wear it/use it THEN sell it it doesn't count.

Is that any better? lol

Yes! Lol. Thanks.

RFW

If you buy or make items to resell then you should tell HMRC.

If you are unsure ask HMRC, they have very useful helplines.

*Scottish*Lass*

If you go to the HMRC website they might have some info that would help. Failing that call them up and ask for advice, they're not always as bad as you think they will be and it's better for you to have all the info and do it right

This link might help

Crowqueen

It's about intention rather than volume or what you make.

For example, you go to a car boot sale and find an antique lamp selling for £5. You think "hey, that looks nice, I'll buy it and it might fit with the curtains in my study". So you get it home, but it's too big and doesn't fit in the place where you thought it might. You sell it on eBay for £20. You make £15, but because you didn't buy it with the intention to sell on, you don't owe any tax on the proceeds.

Now say you see the same lamp at a car boot sale for £5. You think, "hey, that might go for a good price on eBay", you buy it, you take it home, and you sell it for £20. You were trading and you owe tax on that £15 (and if you have another job then you will be making enough money to cover your personal allowance).

That's the difference. Be warned, if you look like you are a business from the other side of things - HMRC and/or eBay will assume you are rather than are not. So don't go thinking you can go and buy 15 lamps for £5 each and as long as you think "those would look nice in the sitting room" then you're OK. At some point it becomes fairly obvious to someone looking that you are no longer doing this in good faith. You don't, for example, go and buy a box of new flip-flops from a guy down the pub and take one out for your own use and then sell the rest on eBay without appearing to be a business. However, if you are doing a lot of DIY or crafting, and have spare parts that you haven't used you can legitimately sell them on without being a business, but you must be prepared for questions and not to do it too often or too regularly.

I don't know how to make it simpler. There is a good Me page on eBay maintained by user talkinpeace which explains a lot about business selling, but they start from the premise that you are a business, so it's a bit difficult if you are not sure in the first place.

EDIT: ScottishLass has a better way of putting it. Also be aware that eBay shoot first and ask questions later, so bear that in mind when listing anything that might make you look like a trader.

Strapped

Also, once you start trading, you have 3 months to register with HMRC or face penalties should you be discovered (and there are plenty of vigilantes on eBay who will report you).

Crowqueen

Perhaps there should be a sticky thread relating to business v private and the law (both as regards returns/trading standards and tax) - it is an issue that comes up very frequently and it's very easy to cross the line without meaning to, particularly since eBay is extremely gung-ho about it nowadays.

Talkinpeace's page could be linked.

I would volunteer to do it, but it may be better coming from someone like Soo who actually runs their own business and knows the situation first-hand.

soolin

There was a sticky thread once but it ended up in a bun fight with a now pPRd user who insisted that it was perfectly OK to not bother registering. Unfortunately that meant the message and help rather got missed in the general name calling and insults.