Ebay "Trader" Status

zenmaster

My son has had a stroke of luck.

His place of work is being refurbished and, in preparation, it has been gutted.

Prior to this he was told "If there's anything you want then take it, as it's all going to the tip".

Being something of a Womble he filled several boxes with old items (which most people will not have heard of) that he thought might come in useful one day.

It turns out that these items are, rather bizarrely, collectables (it takes all sorts) so he has started listing them on Ebay. Based on his early trading he estimates that, with the quantity of the items he has, the total value is well into 5 figures (£10k+).

My question is, given the quantity of items and their high net worth would he be regarded as a "Trader" and therefore liable to any taxes due in keeping with that status, or is it similar to an individual disposing of their personal collection of Star Wars memorabilia for example?

I'm aware that CGT may come into play if the returns are significantly over £10k but, in that case, then he could simply defer some sales until the next tax year.

TIA.

ballisticbrian

Yes, it's a business, it doesn't matter about the intent of the person who gave them to him.

prosaver

lets have a look then?

Flyonthewall

ballisticbrian wrote: »

Yes, it's a business, it doesn't matter about the intent of the person who gave them to him.

Is it though?

zenmaster wrote: »

Prior to this he was told "If there's anything you want then take it, as it's all going to the tip".

Being something of a Womble he filled several boxes with old items (which most people will not have heard of) that he thought might come in useful one day.

He didn't buy or make the items and the ones he took he didn't take with the intention of selling on.

The business isn't his so it's not like he's selling his old stock and it still counts as business profit. The business gave them away so surely that means they're no longer anything to do with that business and OP son isn't using them for business purposes.

So whether it's a business or not is surely all down to the intent of the OP son and he never took them intending to sell them or create a business. He clearly had no intention, he didn't know they'd be worth selling on, he thought they may have a use some day.

I wouldn't class that as a business.

mrcol1000

Agree with the above. He did not buy this to sell. He was given them. Had he kept them for a few months before selling then it would be his personal belongings. If you find something in the street and then sell it, is that a business? If you sell an unwanted Christmas present should you pay tax on that?

OP, Personally, I'd tell your son to stick them in a garage or somewhere safe. Then slowly sell them over a year . There would be no need to mess about with worrying about registering for self assessment and as a business on Ebay. Unless he is intending to take this up as a part time business it really is not worth the hassle.

ballisticbrian

Think of a scrap merchant,. They will often take the items with out charging for the removal expenses on the basis that they will make the profit on resale or recycling of the items. This is basically what he has done. Any scrap merchant could simply say to the tax office "I was given them for nothing so it's not a business."

Flyonthewall

ballisticbrian wrote: »

Think of a scrap merchant,. They will often take the items with out charging for the removal expenses on the basis that they will make the profit on resale or recycling of the items. This is basically what he has done. Any scrap merchant could simply say to the tax office "I was given them for nothing so it's not a business."

That's not the same though. They are clearly going around and collecting scrap to sell for money.

If the OP son had gone around searching for every little thing they could find that had a bit of value so they could sell it on it'd be different, but they didn't. They had no intention at all of selling the items. None. They picked a selection of items they thought may one day have a use.

ballisticbrian

That's not the same though. They are clearly going around and collecting scrap to sell for money.

If the OP son had gone around searching for every little thing they could find that had a bit of value so they could sell it on it'd be different, but they didn't. They had no intention at all of selling the items. None. They picked a selection of items they thought may one day have a use.

How does the tax man determine intention?

Ting-Tang

If somebody gives you a gift(s) and you decide to flog it/them, then that is definitely NOT a business.

Flyonthewall

ballisticbrian wrote: »

How does the tax man determine intention?

I guess that's rather difficult, but in this case:

- He only picked selected items. If he wanted to make money he'd have found far more to sell.

- Once them boxes of items have gone he won't be selling any more. He's not constantly getting items to sell, he won't be going to get more after that. So at the very least, he clearly has no plans for an on-going business.

- They were items being given away by someone. It was a random one-off thing that won't happen again because obviously they've already given everything away or scrapped it. So he didn't going in search of getting the items, the opportunity to get them just came up by luck. So clearly he had no intention of starting a business previous to that.

- The .gov site states "You’re probably self-employed if you:

• run your business for yourself and take responsibility for its success or failure"

OP son doesn't care if things sell. It's not a failure if they don't sell, he'll just hold on to them in case they come in useful one day, as was his intention from the start.

ballisticbrian

The .gov site states "You’re probably self-employed if you:
run your business for yourself and take responsibility for its success or failure"

It's not quite thast clear cut is it? The page you quote fromalso says a load of other stuff:

"What counts as trading?

You’re likely to be trading if you:
##sell regularly to make a profit"


I am also speaking as someone who had our private account selling unwanted clothes etc turned into a business account at the instruction of HMRC and there was no recoursee for appeal. (Had to open a new eBay account)