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

arushofblood

Thanks Soo... once again, please excuse my ignorance, but why do they require a different bank account ?

soolin

arushofblood wrote:

Thanks Soo... once again, please excuse my ignorance, but why do they require a different bank account ?

I've absolutely no idea!

It used to be that you could register without bank details, but scammers were setting up hotmail accounts and changing them every few hours to avoid being caught. So then ebay required Hotmail and other web email account users to register a card or bank details as well, presumably to make it harder for the scammers. Then the requirement seemed to change that bank details couldn't be used on more than 1 account. I assume that is to try and stop the scammers, if only a little. I could see a situation where they open a Hotmail account and register a newly open bank account, get caught scamming so move on..but not being able to open a new ebay account with a Hotmail address as the bank details will already have been used. As they won't have access to a suspended account they can't even remove the bank details on that account to reuse them.

I recently merged an ebay account and as the account was active and not suspended I was able to retrieve the bank details before the merge so I could re use them later to open a new ebay id.

Soo

nightswimmer

Apologies for tagging this onto the end here. I wasn't sure whether to start a new thread but as there is so much tax stuff being covered in this thread I thought it might be best to ask here.

(As an aside, this is such an informative thread, would it be possible to change the title in case anyone in the future is searching for tax information?)

I was just wondering where you stand with tax if you sell items for other people?

If for example you sell on behalf of a relative (their own personal items), but are not being paid for it, but the items are being listed on your eBay account and the money is going through your Paypal/Bank account, will you fall foul of the taxman and do you have to declare anything?

I know you wouldn't if the items were your own, but I just wanted to double check where the items in question weren't actually your own property and the money was going through your accounts.

soolin

nightswimmer that's a good question. Technically you should not be liable for tax if you are no receiving the profits, however you would need to be very clear n your accounts what was going on in case the Revenue pcked you out to audit later.

You would need a good paper trail, keep your bank records showing paypal transfers in and payments going straight out, kind of thing. For better advice see an accountant as they might suggest actually running 2 accounts to keep things clearer.

Soo

arushofblood

Hey nightswimmer ! I've just had a nice little chat with my financial advisor ( ooo, hark at me ) and asked the same question !

My goods are bought using my credit card, my parents and my brothers. I've been advised that I only need to put the items that I've actually purchased on my card through the books. In effect, reducing my taxable profit by two thirds !

arushofblood

Any suggestions for re-titling the thread welcome

nightswimmer

arushofblood wrote:

Hey nightswimmer ! I've just had a nice little chat with my financial advisor ( ooo, hark at me )

LOL - You'll be buying the financial Times next (is that Tax deductable? )

My goods are bought using my credit card, my parents and my brothers. I've been advised that I only need to put the items that I've actually purchased on my card through the books. In effect, reducing my taxable profit by two thirds !

Hmmm...intesresting. What if the taxman asks about where the other items you have sold have come from?

nightswimmer

arushofblood wrote:

Any suggestions for re-titling the thread welcome

I think it's great the way you've got it - thanks.

soolin

arushofblood wrote:

Hey nightswimmer ! I've just had a nice little chat with my finantial advisor ( ooo, hark at me ) and asked the same question !

My goods are bought using my credit card, my parents and my brothers. I've been advised that I only need to put the items that I've actually purchased on my card through the books. In effect, reducing my taxable profit by two thirds !

I'm worried about this...

If someone elses card is used to purchase items that you later reimburse them for and sell for a profit then you are taxable. If however, like in nightswimmers case, being given goods to sell and then passing over the full proceeds and keeping nothing yourself then you are merely acting as the other persons agent. It will be the other person who will therefore pay the tax.

Someone has to be liable for profit made from trading. Therefore either the seller pays the tax, or the person providing the goods and receiving the profit. Just passing goods through a different person with the intention to avoid tax is fraud. For instance, if my OH allows me to use his card to buy things online that I later trade with and make a profit, one of us would have to be liable for the tax, it is logical. Therefore if your financial advisor is suggesting that no tax is liable he is wrong, all you are doing is passing the tax liability to your relatives and you might want to make sure they are happy with that as the taxable profit might put them into a higher tax band and make them liable for extended NI contributions.


Incidentally arushofblood, a financial advisor is not an accountant an dmany only understand the basic tax rules as they apply to the services they personally provide. For accurate advice you need either a certified or chartered accountant who will be able to advise a small trader. For VAT purposes an accountant is even more necessary as this is something completely outside the scope of a FA.

arushofblood

nightswimmer wrote:

Hmmm...intesresting. What if the taxman asks about where the other items you have sold have come from?

Mr Financial Man didn't think it would be a problem. Assured me that they wouldn't look into my account, would just rely on what I was declaring each year and would work from that. They didn't need to know about my Ebay ID so wouldn't go checking back on my past sales either.

*wonders why Mr Finacial Man was wearing a black and white striped shirt and tripped over a heavy metal ball and chain thing whilst going out the door !!!!*