eBay income tax

2fat2slow

Dear All,

I am experienced eBay member, mainly when purchasing items on eBay, used to sell, one bit here and there over 9 years, nothing major, nothing for profit.

I been collecting antiques and vintage items for years. When i started to run out space in my house, i decided start selling what i don't need

As i was ready to list ~100 items, i decided to go with "basic" - eBay shop as fees and everything else just benefits "you" in real.

I opened a eBay shop and started try to sell items obviously for some profit, selling up to 10 items/month

And this is where my eBay experience ended yesterday.

Last few months i earned ~£500, i never realized that personal income TAX should be paid on top of juicy eBay and paypal fees, on top of it..

I want to deal with this TAX issue somehow, and really not looking forward for a taxman letters and possible problems.

I do work, ebay was like more fun at the start, now i am listing more items and everything slowly growing so i don't want find myself one day in a deep hole if i can express myself that way

I think should be big problem to register for personal income tax and pay, but issue is that i do not have a single receipt, etc. for any of my expenses .

Few months ago i borrowed £xxxx from my parents to try expand my small now trade business..In real i o money to someone and still have to pay taxes, sounds silly because it doesn't make any sense to me and in a long run i do not have profit as everything goes back where it started, goes into "building up stock" and now i am hoping that one day, i will brake free from everything and i will be able to pay..

Most of my items now, comes from car boot sales, antique fairs, etc, so i do not have any of receipts either..

So this is main mistake - did't realized that there is addition tax on top of ebay & paypal taxes..

I really would be grateful for reasonable advice here guys, what options i do have with current my situation? Because i caught myself thinking to close everything down..But i love to bring home something unusual and re-search it when understanding what you have on hands, etc.

As for today i have several hundred items in my shop - i just want to find reasonable way to deal with this issue ASAP

Apologies if everything not described very well, a little bit emotional - never realized that i am in very "wrong here" with all ebay stuff..

Kind Regards
2fat2slow

campdave

Phone HMRC or talk to an accountant.

If selling for profit, you are a business. Buying more stock to sell confirms that.

theonlywayisup

Actually it is nothing to do with profit. If you are buying or making items to sell (regardless of any profit/loss) you are a business. You need to be complicit in terms of your eBay listings, returns and customer rights, as well as ensuring your business is paying the correct taxes.

Do you know anyone who is in business, can they recommend an accountant?

Kynthia

Once you were no longer selling items you no longer wanted but started to buy/make things to sell you were trading and making 'income'. Whether there is tax to pay depends on your profit but it probably needs declaring. If you aren't confident reading up on the subject and doing it for yourself, see if you can find a local bookeeper (a qualified accountant might be more than you need right now).

ballisticbrian

and in a long run i do not have profit as everything goes back where it started, goes into "building up stock"

Yes, that's exactly what every business does. Basically when reading your post, you're basically saying you don't know what a business is. And yes, some people run a business for "fun", who runs a business for "misery"?

Kim_13

You should ask whoever you buy from for a receipt if they don't give one as standard. Take along paper and a pen so that they can write one if they don't have any other means of doing so.

These will go into the paperwork to ensure that you aren't essentially taxed on turnover rather than profit.

There are also self employed National Insurance contributions to consider.

A loan (or the part of it repaid in the period) would be an allowable business expense before the tax you should pay is determined. You should have something in writing with your parents detailing your balance and repayment schedule.

mrcol1000

Most of the advice above you need to follow. I'd not bother with an accountant unless you intend to set yourself up as a limited company or sell tens of thousands of pounds of stock and start dealing with VAT.

If you just want to do it as a hobby, go to HMRC website and register for self assessment. It seems daunting but it is quite easy and HMRC provide you with a lot of help. Use a spreadsheet to record all your outgoings and income. Remember you do not need to declare anything personal you sell, only items you buy to resell for profit (regardless of whether you make any profit or not). You can also claim for every penny you pay out in connection with selling items. Everything from envelopes, fees and postage to stock

2fat2slow

Dear All,

thank you for your replays, i am really grateful!

Dear mrcol1000,

i would be very far away from LTD annual turnover if i will start to sell on online trading platform, it is not very possible to go over £81k annually here at this point i would be trading, hopefully up to 10 items a month, this would be great, for how long, no idea.

I held a live chat this morning with tax office adviser;

when i referred, that my personal antiques collection been gained in last five years, previously without even thinking to trade, every single piece been purchased by cash, i spend thousands pounds on my hobby, i believe this is little amount when considering other people's hobbies gained collection at car boot sales and at big antiques fairs..As i mentioned previously price range what i paid for individual items is £5 to several hundreds for one..I was told by tax office adviser that i wont be able to claim any tax back as "expenses" as i do not have a single receipt for it, really?

everyone knows that simply no one who sells in such places, no one will be able to provide receipt for your purchase (-s), so adviser for a future purchases gave me a tip, to collect hand written and signed receipt from sellers..Seriously? No one will do that, especially if someone selling more expensive stuff, or - if you will be purchasing a lot of items for healthy amount, which seller will agree to give identity to expose himself to possible taxation sometime later? Conflict right there, understandable, but i think this tax office issue,not mine one, as i purchasing second hand stuff which been into someone's hands for God knows who long.. if tax office - they can't get theirs hands on antique fairs and car boot sales with taxation - what i have to do with it? this is not my job to trace people down which selling there and obtain receipts and after all when you find something what is good enough to purchase you can end up empty handed when you will ask to sign something and probably or simply just go with it, or you can mess someone's day up, if someone will have great visions that you are taxman agent ) And after all - if to look at it from different angle, if someone interested to pay less taxes:

seller would be interested to sign lower than actual sale price , buyer which probably would be interested to get bigger price on hand written and signed receipt:) i am not talking about myself here.

I want you guys to understand, i came here seek for advice with intentions to pay taxes into a "pot" not to look for ways how to avoid taxes or how to pay less and to understand where i am..i am not surprised that country has estimated £64-£60 billion loss in not paid taxes..sometimes feels that they are not helping but pushing people into the dark tax side, once again, i am not talking about my current situation, i know i will find a way how correctly run small trade business in a future, pay taxes and claim fair expenses which belongs to my pocket.

another side, if i will not be able claim back my expenses back on my purchases, there possibility that you can end up selling something for some loss..so in real, i lost some amount and i will be taxed on my loss?

if you can't confirm second hand purchase with receipt, does it means it came as free of charge? and every single £ taxable? it sounds silly here..

another my question would be, how about travel expenses, because this involves a lot of travel by car, how you can claim it back as expenses? you have necessarily keep petrol receipts or is it enough confirm mileage and that's it? i read some where, that 0.40p can be claimed back for one mile

in real, my turnover probably would be few K annually, nothing major,at least just for now, i like idea about process itself and idea that i probably would be able to build up nice collection of antiques in some time, let's say free of charge, from profit if it it will be one after all..

i would really grateful from legal tax side he, from you mrcol1000 or if there is someone who specialize in antiques online trade, would be very great to hear what is real deal here in my case.


Kind regards
2fat2slow

mrcol1000

If you don't have a receipt for something then you can't claim it as an expense. If you were audited (unlikely as a small trader) you would have to provide a receipt for everything. Otherwise what is to stop you claiming you brought something for £100 but it only sold for £10. Everyone would be at it.

You do not pay tax on a loss but you still need to tell HMRC. You need to record every sale and every expense you can prove. If that means you end the year making a loss then you still need to fill in a self assessement return giving those figures.

Travel expenses you can claim. You just need to keep a record of miles. You can also claim for using your home to run your business. You just need to keep a record of hours spent working. For example listing, packaging, dealing with accounts etc....

vuvuzela

ballisticbrian wrote: »

<snipped>who runs a business for "misery"?

I suspect (and hope) that Mike Ashley currently feels like he does

theonlywayisup

2fat2slow wrote: »

Dear All,


i would be very far away from LTD annual turnover if i will start to sell on online trading platform, it is not very possible to go over £81k annually here at this point i would be trading, hopefully up to 10 items a month, this would be great, for how long, no idea.

What is LTD? If you mean a limited company, the turnover is irrelevant. The £81K you quote is what exactly? The VAT threshold in the UK is £83K.

2fat2slow wrote: »

another side, if i will not be able claim back my expenses back on my purchases, there possibility that you can end up selling something for some loss..so in real, i lost some amount and i will be taxed on my loss?

if you can't confirm second hand purchase with receipt, does it means it came as free of charge? and every single £ taxable? it sounds silly here..

If you don't have receipts you need to keep comprehensive notes as to what you bought, where you bought it and what you paid.

2fat2slow wrote: »

another my question would be, how about travel expenses, because this involves a lot of travel by car, how you can claim it back as expenses? you have necessarily keep petrol receipts or is it enough confirm mileage and that's it? i read some where, that 0.40p can be claimed back for one mile

You need to be keeping comprehensive details about your purchases, sales and expenses. HMRC allow you to claim 45p per mile up to 10,000 miles p/a then it is reduced to 25p per mile.

You seem to have out of date info and if you can't read about it on the HMRC site, you need to go and see them, but better still, go and see an accountant.

https://www.gov.uk/expenses-if-youre-self-employed/overview