How much profit can I make on ebay before paying tax

powertron

I'm a private seller and want to make about £700 a year on ebay selling new items with the sole purpose of making a profit.

Don't plan on making anything like £1000 a year, just a bit here and there, as a private seller can I do this without declaring anything to tax office?

19lottie82

The £1000 rule, doesn't come in to the next financial year, so if you're buying items to sell on for a profit just now, legally, you still need to file a tax return for 2015/16.

And you're not a private seller if you're buying with the intent to sell on, you're a business seller.

For clarification I'd suggest contacting the HMRC directly.

powertron

When the £1000 rule begins next year, can I buy with the intent to sell as a private seller? If not then I won't as I don't want to get thrown in prison.

19lottie82

powertron wrote: »

When the £1000 rule begins next year, can I buy with the intent to sell as a private seller? If not then I won't as I don't want to get thrown in prison.

Don't be silly. You're not going to get "thrown in prison".

Again, if you buy with the intent to sell you're not a "private seller".

I don't see there being a problem with this, but again, you should really contact the HMRC directly for clarification fi you want to do things directly by the book.

campdave

You have a personal text allowance. If you are selling on top of doing a full time job, you may need to pay tax on whatever to you sell if your allowance has been used up in your job

19lottie82

campdave wrote: »

You have a personal text allowance. If you are selling on top of doing a full time job, you may need to pay tax on whatever to you sell if your allowance has been used up in your job

It was announced in the last budget that various entrepreneurs (inc ebay sellers) can earn up to £1000 without having to declare it to the HMRC. This is separate from a personal tax allowance.

Cornucopia

To complicate things, there are three different ways in which the distinction between private and business seller works...

1. HMRC. (Presently virtually anyone who sells regularly and makes a profit is deemed selling as a business upon which income tax is due).

2. Distance Selling. Anyone who sells by way of an organised business is (in theory) liable to honour the distance selling regulations.

3. eBay rules.

the_lunatic_is_in_my_head

19lottie82 wrote: »

It was announced in the last budget that various entrepreneurs (inc ebay sellers) can earn up to £1000 without having to declare it to the HMRC. This is separate from a personal tax allowance.

I may be wrong but I thought you can take £1000, i.e turnover rather than profit?

soolin

the_lunatic_is_in_my_head wrote: »

I may be wrong but I thought you can take £1000, i.e turnover rather than profit?

I think it's profit, I can't seem to find a 'simple' link to HMRC but the Guardian article here are discussing income:

https://www.theguardian.com/money/2016/mar/21/sharing-economy-1000-tax-free-allowances-ebay-airbnb-micro-entrepreneurs

I understood it to be a further allowance, so all small traders (I'm not sure how that is defined) will be allowed an additional £1000 allowance, after that they pay tax on profits above £1000. So for those of us who exceed the £1000 profit per annum we still benefit as less of our profit falls into being taxable.

theonlywayisup

powertron wrote: »

When the £1000 rule begins next year, can I buy with the intent to sell as a private seller? If not then I won't as I don't want to get thrown in prison.

As has been pointed out, it's not just HMRC that you have to be complicit with to sell lawfully.

Tax and profit have nothing to do with your obligations when selling online as a business. Whatever HMRC think you are/call you, you are a business apropos online selling legislation. Therefore you need to comply with the rules and regulations surrounding it.