updates to ebay privacy notice

soolin

Emails have gone out and are appearing in ebay messages about the update to their privacy T and Cs. As usual I glance through to see if any of the changes are in any way useful.

This new lot now show the following as a 'notable' change

"Additional information about the data we process in order to comply with new consumer, anti-fraud and tax regulations."

I'm sure this sentence will be much discussed on the user boards and other forums and there are already a few suggestions that this whilst being a legal requirement might also be a way of addressing the major complaint by business sellers about the number of businesses selling as a private seller. It does seem odd though that ebay fail to address the blatant breaking of ebay T and Cs where obvious businesses (I've even seen some with business names in their listings) are allowed to avoid fees by mis registering - and instead relying on HMRC or DWP to catch them out.

This also follows major changes in the US where the threshold of reporting ebay sales (and also on all other selling sites ) was lowered considerably and now virtually all sales are reported yearly to the tax authorities. In the US it makes very little difference to the use of ebay though as they don't differentiate like ebay UK do between business and private sellers, sellers are just expected to file taxes if appropriate but pay no extra fees to sell as a business.

soolin

Just to add that on other forums there have been some concerns raised where sellers don't understand the difference between business and private selling and think that they will be getting tax demands even selling their own unwanted items.  HMRC are only interested in people buying or making things to sell on, regardless of income if you are truly just selling your own items then you need not worry.

It is not unknown for HMRC to send an enquiring letter asking about online or other selling, but should anyone get one please don't worry just respond with accurate information. I've seen quite a few of the letters over the years I did voluntary work, they can seem quite alarming and accusive, but a thorough read shows they are merely making enquiries. The ones that are dangerous is when either DWP ask you to attend an interview due to practices that have come to light (and DWP were more active with the people I assisted than HMRC) or HMRC just get fed up with a non response and send an estimated tax bill out, although this s a final resort if nothing else has elicited a proper reply. 

the_lunatic_is_in_my_head

eBay have always been useless at enforcing their policy, there was a thread on the Powerseller Forum many years ago, in the days when it was a busy place, asking if eBay could change one thing what would it be and 95% said enforce their policies. 

They used to introduce a policy, enforce it for a while to make a point and then seemingly forget about it.

Nowadays I think they prefer to rely on automated systems, if you create a new listing and it seems to be a duplicate you'll get an error saying it looks as if this item is already listed but of course make a tiny change and you can bypass the automated detection.

Seller standards are automated with defects and I'm sure you know the pros and cons of this by reading many debates over the years  

Sellers based outside the UK with stock in the UK have been required to registered for VAT for years (forever?) but none of the marketplaces seemed bothered about this and why would they be? Goods being 20% cheaper is a bonus for them as the cheaper stuff is the more people buy and someone in China doesn't have much fear the UK government is going to turn up asking questions about their business. 

Once the marketplaces were made jointly and severally liable for VAT they suddenly sprung into action.

This leads onto the business/private issue as eBay seems to stick with the VAT principle well but that is their limit. I've seen a private account dropshipping from Amazon with 10,000 listings, I've seen many listings on private accounts with 2000+ sold on a single listing but eBay isn't interested. I think they are happy to take what they can, something is better than nothing, they appear to have no legal obligation and as far as they are concerned all sellers are equal in the sense they must comply with the Moneyback Guarantee. 

soolin said:

It does seem odd though that ebay fail to address the blatant breaking of ebay T and Cs where obvious businesses (I've even seen some with business names in their listings) are allowed to avoid fees by mis registering - and instead relying on HMRC or DWP to catch them out.

You can certainly see why some business sellers would prefer private account, the FVFs seem good for businesses until you add the VAT, even the fixed closing fee is 30p for private accounts and 30p+VAT (36p) for business accounts. Throw in the FVF promos and the fees can be very cheap on a private account. eBay was doing some promos for business accounts (I had 75% off quite a few times) but it's been a while since I stopped trading so I don't know if they still do them. 

In order to avoid a witch hunt it's important to note that not every business seller with a private account is trading without being registered as self employed, some may be doing this as a business decision as the consequences of not following eBay's rules are clearly very few. 

There are other requirements for businesses, one thing often focused on is displaying an address, but that forms part of a long list of required information and very, very few business accounts meet that on eBay so it's an even problem across both types of account owners. 

Returns are another issue but a smart business using a private account would have them switched on. 

The only two things that will address this is eBay levelling the playfield in terms of the fees charged or something where the government forces them to do more through legislation. 

The above said isn't a recommendation to use a private account for your business, I ran an eBay business for a very long time and there are some good advantages to having a business account for those running a serious business but I feel there isn't enough to entice those running "hobby businesses" to make the switch and ultimately that is a failing on eBay's part.  

AnimeLuvin

soolin said:

Just to add that on other forums there have been some concerns raised where sellers don't understand the difference between business and private selling and think that they will be getting tax demands even selling their own unwanted items.  HMRC are only interested in people buying or making things to sell on, regardless of income if you are truly just selling your own items then you need not worry.

It is not unknown for HMRC to send an enquiring letter asking about online or other selling, but should anyone get one please don't worry just respond with accurate information. I've seen quite a few of the letters over the years I did voluntary work, they can seem quite alarming and accusive, but a thorough read shows they are merely making enquiries. The ones that are dangerous is when either DWP ask you to attend an interview due to practices that have come to light (and DWP were more active with the people I assisted than HMRC) or HMRC just get fed up with a non response and send an estimated tax bill out, although this s a final resort if nothing else has elicited a proper reply. 

Hi

I've just gotten said letter and I'm terrified. Got until 21st to respond but they're on strike?

I've basically been collecting figures etc and stuff for years and periodically been selling them, when I want a new figure or something or to make space.

But last year I decided I'm quitting it o collecting and have listed pretty much my whole collection, I've sold quite a bit.

What do I do here? They're asking about additional income from marketplace sales.

Also, I looked up and apparently if a single chattel isn't £6000 or more then I shouldn't be getting charged capital gains? Each figure has been in the hundreds range.

I'm so confused as what to do, this whole situation is incredibly stressful.

Thanks for the help!

soolin

AnimeLuvin said:

soolin said:

Just to add that on other forums there have been some concerns raised where sellers don't understand the difference between business and private selling and think that they will be getting tax demands even selling their own unwanted items.  HMRC are only interested in people buying or making things to sell on, regardless of income if you are truly just selling your own items then you need not worry.

It is not unknown for HMRC to send an enquiring letter asking about online or other selling, but should anyone get one please don't worry just respond with accurate information. I've seen quite a few of the letters over the years I did voluntary work, they can seem quite alarming and accusive, but a thorough read shows they are merely making enquiries. The ones that are dangerous is when either DWP ask you to attend an interview due to practices that have come to light (and DWP were more active with the people I assisted than HMRC) or HMRC just get fed up with a non response and send an estimated tax bill out, although this s a final resort if nothing else has elicited a proper reply. 

Hi

I've just gotten said letter and I'm terrified. Got until 21st to respond but they're on strike?

I've basically been collecting figures etc and stuff for years and periodically been selling them, when I want a new figure or something or to make space.

But last year I decided I'm quitting it o collecting and have listed pretty much my whole collection, I've sold quite a bit.

What do I do here? They're asking about additional income from marketplace sales.

Also, I looked up and apparently if a single chattel isn't £6000 or more then I shouldn't be getting charged capital gains? Each figure has been in the hundreds range.

I'm so confused as what to do, this whole situation is incredibly stressful.

Thanks for the help!

The standard advice for a start, and the first thing we always advised, was to write back saying you are not trading, instead you are selling off your own personal collection of item. The items were bought for personal use over a period of years and not bought to resale. 

Any proof you have as well needs to be retained, if for instance you bought any and have receipts , keep the paperwork safe, you just need to show a history of purchases over a longer time period. Do you have any historical photos of them , or do you have a specialist display unit that you can photograph (we once helped someone with a large transport collection as they had specialist cabinets designed entirely for display and it showed that the items were bought for personal use) 

Most of the time a simple response is accepted, the only time it can get difficult, and I've seen it happen, is where any online selling platform has the seller appearing to work as a business, showing lots of stock available at one point, perhaps even using a business account to take money or expecting collection from a shop. 

Ideally though you want to show some items were bought and then sold some time later at a loss, just to make room to buy more. 

Keep letters and responses short and factual , wait for them to ask specific questions before you offer too much lengthy explanation. 

AnimeLuvin

Hi thanks for the response

So I write a letter myself rather than using the declaration form on the letter I received? Or tick one of the the boxes?
Would it be best to include the reference number if I'm just writing a letter.

I was also thinking of calling to explain the situation if I can actually get through on the phone to just clean things up. The number on the letter is
0300 123 0998

Just want to make sure I respond before the deadline on 21st of this month.

Some of the more recent figures sold I do have the email when I ordered them from shops etc.

I should have some old pictures as I enjoyed taking them.

I do however still have about 50 figures displayed plus some statues across 5 glass detolfs display cases and a garage rack if that helps as I still havent sold those yet, I'll be keeping some though.

I've sold some for a loss definitely.

Hopefully they'll just mark it as a collection sale or something.

Thank you

soolin

AnimeLuvin said:

Hi thanks for the response

So I write a letter myself rather than using the declaration form on the letter I received? Or tick one of the the boxes?
Would it be best to include the reference number if I'm just writing a letter.

I was also thinking of calling to explain the situation if I can actually get through on the phone to just clean things up. The number on the letter is
0300 123 0998

Just want to make sure I respond before the deadline on 21st of this month.

Some of the more recent figures sold I do have the email when I ordered them from shops etc.

I should have some old pictures as I enjoyed taking them.

I do however still have about 50 figures displayed plus some statues across 5 glass detolfs display cases and a garage rack if that helps as I still havent sold those yet, I'll be keeping some though.

I've sold some for a loss definitely.

Hopefully they'll just mark it as a collection sale or something.

Thank you

I am out of date with the paperwork they send out now, it used to be a letter asking if you wanted to update your information due to other activities. If the form can be utilised to say what you need to say then use that. 

AnimeLuvin

soolin said:

AnimeLuvin said:

Hi thanks for the response

So I write a letter myself rather than using the declaration form on the letter I received? Or tick one of the the boxes?
Would it be best to include the reference number if I'm just writing a letter.

I was also thinking of calling to explain the situation if I can actually get through on the phone to just clean things up. The number on the letter is
0300 123 0998

Just want to make sure I respond before the deadline on 21st of this month.

Some of the more recent figures sold I do have the email when I ordered them from shops etc.

I should have some old pictures as I enjoyed taking them.

I do however still have about 50 figures displayed plus some statues across 5 glass detolfs display cases and a garage rack if that helps as I still havent sold those yet, I'll be keeping some though.

I've sold some for a loss definitely.

Hopefully they'll just mark it as a collection sale or something.

Thank you

I am out of date with the paperwork they send out now, it used to be a letter asking if you wanted to update your information due to other activities. If the form can be utilised to say what you need to say then use that. 

It gives me three options

1. Declare tax position

2. Confirm you have correctly declared income

3. I have not declared online income
Box below to Declare Reason for not declaring it.

I feel like just sending it back with one of those options isn't a good explanation.

Can you also please confirm that the 6k chattel rule is correct for a single item

Ie I haven't sold any single item for over 6k so would be exempt from cgt?

However I have sold over 6k worth over multiple items.

Thank you

soolin

It’s been years and years since I’ve practiced as an accountant, but it is possible to be liable for CGT on a ‘collection’ rather than individual items, but ‘collection’ is a difficult thing to define and would need a more current accountant . I would suggest though that an assortment of oddments is not a collection as such, but I wouldn’t rely on my knowledge anymore. 

Anyway, your letter will be concerned with income from trading, so option 2 - 

2. Confirm you have correctly declared income

you could then perhaps attach a brief letter stating that you have been selling off personal items obtained for personal enjoyment/use over a Period of years , and await the next move. They may well just drop it at that point.

I suspect with the rules about online sites needing to declare sellers activities on their sites at quite a low level, that these letters are sent out to thousands of people just fishing to see if they get any bites at all, and are no more serious than that. 

However hopefully others will log in to this thread and add their own opinions. 

JAG

My understanding is you can earn a profit of £1000 before tax kicks in, but HMRC wouldn't know how much is profit from the sales figures that eBay report to HMRC.

I doubt they would send letters to everyone with a sales figure of £1000 in a year, and must use a sales figure whereby they suspect you owe them tax. At a guess what percentage of sales figure they are using to generate a £1000 profit, but at 50% profit would give £2000 of sales. I would have thought a more conservative figure of say 30% profit giving an annual sales figure in excess of £4000.

Perhaps if those that have received a letter could indicate their yearly sales figure, it may help others.

soolin

JAG said:

My understanding is you can earn a profit of £1000 before tax kicks in, but HMRC wouldn't know how much is profit from the sales figures that eBay report to HMRC.

I doubt they would send letters to everyone with a sales figure of £1000 in a year, and must use a sales figure whereby they suspect you owe them tax. At a guess what percentage of sales figure they are using to generate a £1000 profit, but at 50% profit would give £2000 of sales. I would have thought a more conservative figure of say 30% profit giving an annual sales figure in excess of £4000.

Perhaps if those that have received a letter could indicate their yearly sales figure, it may help others.

The £1000 overlook is not £1000 profit it’s £1000 turnover , so total income including things like postage before any expenses, and that’s less than £20 a week. It’s also nothing to do with whether tax is payable or not, the £1000 is the amount you can have as turnover from a self employed business or sales before it needs to be declared. Once the turnover exceeds £1000 the seller is required to declare their income and prepare proper accounts , but even then might not necessarily pay tax as that depends on what other income is being declared. 

However, OP says they are selling off personal items and not trading, so no limits or tax implications apply and nothing needs to be declared.

As for reporting limits by online sites, I’ve seen several mentions of figures that are less than £1000 , perhaps HMRC keep a database to see what people might need speculative letters and there is no indication that sites like ebay are allowed to differentiate between private and business sellers. Whether someone is a private seller or a trader is between the individual and HMRC.