Tax discussion -was -At the risk of being flamed !!

greeneye

customswolf wrote:

I work for HMRC, and I can tell you it's not just scare-mongering.....

Well tell us how it's going to be implemented then and maybe people like SC might take you seriously.

Techno

Is the profit from e-bay actually income or capital gains? If I buy a house (not my principle residence) and sell it on at a profit I make a capital gain - is e-baying not the same?

baffcat

Techno wrote:

Is the profit from e-bay actually income or capital gains? If I buy a house (not my principle residence) and sell it on at a profit I make a capital gain - is e-baying not the same?

Nope. Money made from ebay is income, in the same way any other, normal trading produces income. Property is treated in a completely different manner, and thus CGT is the bane of the property developer's life.

Regards

Baff

WHA

Techno wrote:

Is the profit from e-bay actually income or capital gains? If I buy a house (not my principle residence) and sell it on at a profit I make a capital gain - is e-baying not the same?

Wrong - if you buy a property with the intention of renovating and selling on quickly, you are trading and it is taxed as income, not capital gains. To get the capital gains taxation treatment, your intention must be to keep it to live in or as an investment (i.e. buy to let). Property is no different to any other commodity if the intention upon purchase is to sell for a profit.

baffcat

WHA wrote:

Wrong - if you buy a property with the intention of renovating and selling on quickly, you are trading and it is taxed as income, not capital gains. To get the capital gains taxation treatment, your intention must be to keep it to live in or as an investment (i.e. buy to let). Property is no different to any other commodity if the intention upon purchase is to sell for a profit.

I stand corrected *gnashes teeth* I really should make sure I know what I'm talking about before opening my cakehole.

Baff

Techno

I think we need to tell Sarah Beenie then because all those people doing up their houses on property ladder only ever talk about CGT not income tax. I've only seen income tax mentioned if they are paying themselves a wage to do the work from the profit

Contains_Mild_Peril

I think CGT would only apply if selling something hugely valuable (e.g. a house or an antique worth a fortune), which doesn't happen a great deal on eBay.
With regards to the distinction between selling personal possessions and selling items bought for profit, does anyone know how I stand if I buy a mixed lot of bric-a-brac at an auction with the intention of keeping the items I want for myself and selling those I don't like/ wouldn't use?

customswolf

Just to follow-up my slightly mysterious comment earlier.

Obviously I can't reveal any methods or procedures, as they're restricted, but I can say that there are teams of people who are looking at internet trading. Whether you're one of the people who gets their records looked at will depend on many things, and I'm not privy to that kind of operational detail (and even if I was I couldn't say!)

I don't think they've been doing it for the past 7 years (although I wasn't here then), but it doesn't mean they won't be doing it in the future.

As for advising the public, there's detail on the website. I don't know if there's plans to do more than that.
http://www.hmrc.gov.uk/guidance/selling/income.htm

My advice - get professional advice and get registered if needed.

But please don't assume that the taxman won't ever look at your ebay income.

wigglebeena

Many apologies for resurrecting an elderly thread. I'm going to check my lease (when I can find it: where has the !!!!!! gone?) to see if there are any clauses restricting use of premises for business.

Assuming that there is such a clause, what have other people done? I'm thinking i would need some (hella cheap) business premises, or abandon the whole idea. Anyone know any links/sources for such cheap premises (nothing fancy necessary). A friend I have discussed it with has received flyers for tiny, cubicle-like storage/office facilities with electricity and water 'on tap' - unfortunately she has thrown them away. Anyone know of any scheme like this?

COOLTRIKERCHICK

wigglebeena wrote: »

Many apologies for resurrecting an elderly thread. I'm going to check my lease (when I can find it: where has the !!!!!! gone?) to see if there are any clauses restricting use of premises for business.

Assuming that there is such a clause, what have other people done? I'm thinking i would need some (hella cheap) business premises, or abandon the whole idea. Anyone know any links/sources for such cheap premises (nothing fancy necessary). A friend I have discussed it with has received flyers for tiny, cubicle-like storage/office facilities with electricity and water 'on tap' - unfortunately she has thrown them away. Anyone know of any scheme like this?

depending on were you live.. why dont you contact your business eye... or similar new business start up.. as they know where the cheap units are.....

i had the keys to one in my local area yesturday....they start from £55 pm and go up to just over £300 pm. and that includes the rates....

i have got the £55. one which to be honest is too small.. but... it will do for now.... for storage..etc....