Online sellers offered chance to settle tax bills

oldone_2

chemical.galaxy wrote: »

According to the article 'the focus would be the sites’ 32,500 biggest traders'

H.M.R.C. officers have targets to meet, and have to justify the amount of time they spend on an individual case.
Small traders with low turnover, and therefore low tax recoverable will not be a cost effective target to go for, even factoring in any fines liable for non-declaration.

This campaign is aimed at 'scaring' such small traders into revealing themselves, since the amount of tax recoverable through this campaign will be more than the costs involved.

If an officer is assigned to a case he must be sure that the amount recovered exceeds the cost and time he spends on it.

dangerousuk2

Hopefully HMRC Rep can clarify something for me.

The 32,500 letters that have been sent out;

HMRC must already have info on these sellers, so does the recent report about Ebay and Amazon handing over seller details:

http://www.dailymail.co.uk/news/article-2143972/Cracking-internet-sales-HMRC-hunt-Ebays-biggest-tax-dodgers.html?ito=feeds-newsxml

Does this relate to the individuals that have already been contacted via letter, or is the disclosure by Ebay and Amazon going to lead to more letters going out?

Steve

Harry_Stotle

I'm worried now, I've never considered myself a trader just a barmy compulsive collector. I've collected for over 50 years and I've amassed a collection worth over £150,000 . While I was working I had enough spare cash to finance my hobby.
After taking retirement I found my pension wasn't enough to pay all my bills and leave me a reasonable income. So I started to sell some of my collection off, duplicates and the like, No problem there as some of it I'd owned since I was young. I sold about 20 pieces a week as this was all I needed to top up my pension.
But over the years one or two pieces had been damaged or broken so I bought replacement parts etc to make them saleable. I've just looked at the HMRC video and this action makes me a trader! The problem is I have kept absolutely no records at all...what do I do now???

dangerousuk2

It's a fine line mate...from what you are saying it sounds like you aren't liable for tax on your collection as you have owned the items for quite a while before selling them on.
Improving items to sell them does constitute trading though, but it all comes down to how much profit you make? The tax due may be minimal.
Did you sell the items on Ebay?

soolin

dangerousuk2 wrote: »

It's a fine line mate...from what you are saying it sounds like you aren't liable for tax on your collection as you have owned the items for quite a while before selling them on.
Improving items to sell them does constitute trading though, but it all comes down to how much profit you make? The tax due may be minimal.
Did you sell the items on Ebay?

Whether or not someone is a trader does not depend on how much profit is being made.

'Harry' needs to talk to HMRC and clarify exactly what his position is and I would suggest phoning them would be a good start.

dangerousuk2

Good point, sorry for the misinformation. A Tax return would need to be submitted whether there was any profit or not

lovinituk

Harry_Stotle wrote: »

I'm worried now, I've never considered myself a trader just a barmy compulsive collector. I've collected for over 50 years and I've amassed a collection worth over £150,000 . While I was working I had enough spare cash to finance my hobby.
After taking retirement I found my pension wasn't enough to pay all my bills and leave me a reasonable income. So I started to sell some of my collection off, duplicates and the like, No problem there as some of it I'd owned since I was young. I sold about 20 pieces a week as this was all I needed to top up my pension.
But over the years one or two pieces had been damaged or broken so I bought replacement parts etc to make them saleable. I've just looked at the HMRC video and this action makes me a trader! The problem is I have kept absolutely no records at all...what do I do now???

This might come under personal Capital Gains. There are annual allowances for this before you pay tax and a whole set of rules surrounding collections etc. Speak to HMRC for a clearer picture as this area can get a little complicated.

tonyf33

Seems to me HMRC always go after the small man which generally always ends up being a net loss for the treasury. (after HMRC costs)it's pretty sickening when there are quite a few large companies who pay minimal tax on their profits (some as low as 2% see guardian 'tax gap' article re Diageo) due to the poor legislation in force. Because of this tens if not hundreds of Billions every single year slip out of the country yet HMRC do nothing.
So when I buy a bike at a car boot sale because I like the saddle and want to fit it to one in my collection and sell the rest on at a profit, please excuse me whilst I don't tell HMRC all the details, they can jog on.

lovinituk

tonyf33 wrote: »

Seems to me HMRC always go after the small man which generally always ends up being a net loss for the treasury. (after HMRC costs)it's pretty sickening when there are quite a few large companies who pay minimal tax on their profits (some as low as 2% see guardian 'tax gap' article re Diageo) due to the poor legislation in force. Because of this tens if not hundreds of Billions every single year slip out of the country yet HMRC do nothing.
So when I buy a bike at a car boot sale because I like the saddle and want to fit it to one in my collection and sell the rest on at a profit, please excuse me whilst I don't tell HMRC all the details, they can jog on.

What those big companies are doing is (generally!) legal. HMRC cant do anything because they are acting within the law. For that to change the government has to change the policy - that's not HMRCs job!

I think you are a little petty regarding your example of the bike. As a one off then its no issue. HMRC are going after the people who do it regularly as a means to make money but still decide they shouldn't be paying any tax. Its simple really and if you are not sure then a quick call to the tax office will confirm it for you. No need to blow it out of proportion!!

Crowqueen

lovinituk wrote: »

This might come under personal Capital Gains. There are annual allowances for this before you pay tax and a whole set of rules surrounding collections etc. Speak to HMRC for a clearer picture as this area can get a little complicated.

Unless a single item in his collection was worth more than the cap-gains threshold, he would not be liable for any tax selling that at all.

However, if he set up a shop on eBay to sell it all off they might get some attention from competitors who think they should be registered, spooks that are keeping an eye out for unregistered traders who like to claim they are selling off a collection and so on - so they would still have to tread carefully.

The day of the small collector selling a collection and also buying objects and still remaining a private seller in other people's eyes is long gone. Unfortunately with the 2008 regs, it is now customary for eBay and other people to regard larger volume sellers as businesses until they can prove otherwise. Thus you have to be careful - you can still do something like this, but you have to play it very sensitively to appearances and to buyers' expectations when they see a large volume seller.