Should I become an Ebay Business Seller

LondonZ17

Hi everyone,

Just looking for advice.

I have been selling on Ebay for over 20 years. I used to shop far too much, so it was very useful in reselling my purchases, sometimes at a loss, other times at a profit, as I am very good at finding good quality items cheaply. This year I have been experimenting with buying to resell, as I have a £9K debt to clear. I managed to make a £900 profit since 1st Jan. Half these items I had bought for myself over the last year knowing they were bargains; the other half was exclusively to resell.

I have no problems with declaring this to HMRC, but at what point to I have to declare the income? And how would I do it - would I be a freelancer, sole trader, or something else?

Not sure I will continue with it. It's a lot of work, and have a part-time job and another  freelance skill that has brought me good money when I worked at it, and which would be more fulfilling than trips to the post office. But this seems like a quick way to repay my debt. 

If I do decide to continue buying & reselling, do I have to change my Ebay account to a business account? Or can I have a personal account and declare the income as freelance income?

Anyway, lots of questions and decisions to make so I hope you can help!

Thanks in advance, 

All the best

L

Spoonie_Turtle

On the eBay side I don't know what the limits are (others will) but for HMRC you would be a sole trader and have to declare  income from trading over £1000 in a tax year.  So your items that you bought for yourself to use then later resold aren't trading, but the items you bought for the purpose of reselling are.  The trading allowance is gross income, not profit.
https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income#trade

However if you are already registered for Self Assessment (from your freelancing) you may have to include this extra trading income regardless of the amount, not sure.

RFW

As above, if you buy to resell then you are a business. You can check with HMRC as to what you need to do with taxes. Given other income you may be wise talking to an accountant and could find that there are tax benefits to the business (I've no idea on that without knowing more of what you do).
Taxes and registration aside I think you're better off as a business seller on Ebay. There are benefits as a seller to doing that. Plus there's less of a risk of falling foul of any consumer problems if you are correctly registered.

fenwick458

LondonZ17 said:

Not sure I will continue with it. It's a lot of work, and have a part-time job and another  freelance skill that has brought me good money when I worked at it, and which would be more fulfilling than trips to the post office. But this seems like a quick way to repay my debt. 

I'd just keep going as you are until you've sold all the stuff you bought for yourself, and you get to the point where you are 100% buying just to sell, and you know you are going to continue it.
seems pointless setting it up as a business if you don't know you're going to continue it and sound too busy for it

soolin

If your £900 is profit and not turnover then your probably over the £1000 declarable limit anyway, as it’s total income including postage before expenses that matters.

As for eBay they do require sellers to have a business account in your circumstances as you are buying to resell , however it doesn’t seem very much enforced anymore, you should also remember buyers rights and if you are going to trade on a private account temporarily be fair to your customers and offer a proper change of mind return policy . 

Well done on working to clear your debts. 

Spoonie_Turtle

soolin said:

If your £900 is profit and not turnover then your probably over the £1000 declarable limit anyway, as it’s total income including postage before expenses that matters.

That's what I thought at first but as OP says it's a mix of unwanted things and things bought to resell, might not be yet from trading income.

LondonZ17

Thank you very much for the advice. Today I am very bored with Ebay, after parcelling things up and rushing to the post office before it closed. The sourcing part is fun, but it's not a very fulfilling way to earn a living. Might not seem like much, but parcelling up even a few things takes time and energy when one is supposed to still be meeting other deadlines, socialising, etc...

So I will calculate my turnover of things bought to sell and declare it on my next tax return. Might still sell on and off but at the moment feel like a break from it...

@Soolin, thanks, very useful advice on the Ebay business side. Yes, it feels great to be clearing my debts! 

urbansense

LondonZ17 said:

Thank you very much for the advice. Today I am very bored with Ebay, after parcelling things up and rushing to the post office before it closed. The sourcing part is fun, but it's not a very fulfilling way to earn a living. Might not seem like much, but parcelling up even a few things takes time and energy when one is supposed to still be meeting other deadlines, socialising, etc...

So I will calculate my turnover of things bought to sell and declare it on my next tax return. Might still sell on and off but at the moment feel like a break from it...

@Soolin, thanks, very useful advice on the Ebay business side. Yes, it feels great to be clearing my debts! 

I so agree with you on the logistic side of things when it comes to selling on Ebay. I have done it in the past and it does take a lot of time and energy in packing and posting. I think providing services, such as graphic design or copywriting, is much more fulfilling way to earn money.

soolin

urbansense said:

LondonZ17 said:

Thank you very much for the advice. Today I am very bored with Ebay, after parcelling things up and rushing to the post office before it closed. The sourcing part is fun, but it's not a very fulfilling way to earn a living. Might not seem like much, but parcelling up even a few things takes time and energy when one is supposed to still be meeting other deadlines, socialising, etc...

So I will calculate my turnover of things bought to sell and declare it on my next tax return. Might still sell on and off but at the moment feel like a break from it...

@Soolin, thanks, very useful advice on the Ebay business side. Yes, it feels great to be clearing my debts! 

I so agree with you on the logistic side of things when it comes to selling on Ebay. I have done it in the past and it does take a lot of time and energy in packing and posting. I think providing services, such as graphic design or copywriting, is much more fulfilling way to earn money.

I’m not entirely sure where graphic design or copywriting come into this? I sell on eBay, alongside other sites and yes I could earn more doing about a million other things- but online sales can be quick and easy and hardly  difficult if you just want to earn a few pounds to clear debt.