The Taxman is onto you....

chivvy

Anyone who uses Ebay to sell a lot of stuff - get selling, as the taxman is going to clampdown on people who use Ebay as a business according to the news on the radio just now......BOO

nursemolly

surely if its a legit business they would be paying a "business" sort of tax anyway??
a lot of people just sell there unwanted items. how can they enforce this
it will be like having a taxman at the boot and jumbles sales....lol

WHA

Very simple really. Two possible ways for starters -

Firstly, sort the ebayers into a list by descending number of items sold. (Tax authorities have a legal right to inspect Ebay's records). Work down the list, checking the names and address of the most active ebayers. Anyone with a few thousand items sold is probably not "domestic" and the tax authorities can check that they are declaring business profits on their tax returns. There won't be that many who are into the thousands so it is not an impossible task to check them out.

Secondly, sort on "new" items being sold - anyone selling more second hand items than new is unlikely to be a "business trader", but anyone selling more "new" than used can be looked at in more detail.

Clearly, these two methods won't pick up every "business", but most "tax inquiry" work is now risk-based and the tax authorities should be looking for the biggest and/or easiest to catch first. Such selection will also find some people who really aren't in business and it would be fairly simple to explain away their activities to prove the contrary.

I would imagine that businesses with "bricks and mortar" shops or warehouses will already be registered with the tax authorities - if they hadn't registered, they are fairly easy to spot by the tax investigators. It is more likely to be those who "dabbled" with ebay at first and then started to stray into "business", maybe working from home part time etc., that may not even realise they are "in business" for tax purposes.

culpepper

I think im right in thinking I can 'earn' about £3,000 before paying tax which is about £60 a week. I'd be lucky to 'earn' that!
I dont think they could really tax people selling their own no longer needed things (as I am ) as they usually sell for less than they were originally bought for in the first place so they would count as a loss.

WHA

Selling anything that you have used yourself is completely outside taxation unless you happen to make a few thousand pounds profit on a single item, i.e. a valuable antique, which may become liable to capital gains tax. You can certainly ignore selling, say, a soft toy for £10 if you only paid £5 for it, where your little one has played with it!

However, if you buy anything specifically to sell, whether new or used, you are "trading" and need to register with the Inland Revenue as such. I am sure that if the amounts are trivial, you don't need to bother, but if you look to be making "profits" totalling a few hundred pounds or more, then you need to tell the taxman, even if those profits are covered by your annual exemption of £4.8k p.a. (as far as I know, there is no "set" minimum, but the tax people won't be interested for very small amounts.)

VH

If you go to work and earn more than 5kish then your tax exemption will already be used up anyway.

I think these IR rumours are just scare stories. It's sensible to declare any income earned from EBay if you are making a reasonable amount. But the IR aren't going to bother chasing you if you're earning a few quid from selling wristbands and such.

Long Live the Black Economy! Two fingers to the Taxman!

Poppy9

mollytrundle wrote:

surely if its a legit business they would be paying a "business" sort of tax anyway??
a lot of people just sell there unwanted items. how can they enforce this
it will be like having a taxman at the boot and jumbles sales....lol

Taxmen already trawl Car boot sales down here. They note down vehicle registrations and how often you are appearing at sales. The IR now sets its departments target collection rates so watch out. The info they get from Ebay will be used to check against whether people are registered for self assessment or paye and they will take it from there.

RACHIE77

in principle this is a good idea as it stops people from conning the government out of money but bet its the small fry people that end up getting caught, the bottom of the ebay food chain so to speak.... or am i just cynical?? :rolleyes:

Ivenofinmoney

I'm not a tax expert, but I think the Inland Revenue get interested after £300, If you receive a tex return there is a box to declare earnings outside or your normal employment earnings.

Note: If you don't recieve a tax return, it is your responsibility to tell the tax man that you should be if you have earnings which are not taxed !!!

VH

RACHIE77 wrote:

in principle this is a good idea as it stops people from conning the government out of money but bet its the small fry people that end up getting caught, the bottom of the ebay food chain so to speak.... or am i just cynical?? :rolleyes:

Conning the Government out of money? I thought it was they who conned us out of money?

kabman

I presume that the amount you receive for an item you sell, is not what you tell the tax man. It must be the clear profit from the sale. After taking Ebay fees, postage and the original cost of the item into account.

If I sell something that cost me £5 to buy and sells for £10 inc, then my profit is £10-£5-postage-ebay fees, so your profit might be £2 and not £10.

Is this correct?