Ebay seller , need to disclose profit

mirko

goodfella66 said:

OP seems to have disappeared. Comes on here, asks for help and then doesn't even bother replying, even if it's just to say thanks. Really annoys me!

I don't disagree, and I find it odd.

However it's an interesting topic. I've found people's thoughts for and against accountants interesting and I'm sure others will now know their responsibilities should they be "trading" on eBay.

I'd be fascinated to know how this story unfolds but it looks like we may never know...

Archergirl

I wouldn't have thought they need to worry about the first year and the last year as I believe you can make £1000 on eBay without disclosing it. 
HRMC could probably check with eBay if necessary and see what they were selling so no point in lying about it.
I wonder what they will decide to do and why they didn't think of tax the year they made 17K.............

Spoonie_Turtle

Archergirl said:

I wouldn't have thought they need to worry about the first year and the last year as I believe you can make £1000 on eBay without disclosing it. 
HRMC could probably check with eBay if necessary and see what they were selling so no point in lying about it.
I wonder what they will decide to do and why they didn't think of tax the year they made 17K.............

That £1,000 is for total income, not profit.

tightauldgit

Archergirl said:

I wouldn't have thought they need to worry about the first year and the last year as I believe you can make £1000 on eBay without disclosing it. 
HRMC could probably check with eBay if necessary and see what they were selling so no point in lying about it.
I wonder what they will decide to do and why they didn't think of tax the year they made 17K.............

I could be wrong but i don't believe that HMRC have any right to ask for, nor Ebay to disclose your trading information.

I believe all HMRC can ask is for YOU to provide a history of your trading. And it looks like I can only see my history for the last 3 years. 

And yes the £1000 limit is revenue, not profit.

soolin

tightauldgit said:

Archergirl said:

I wouldn't have thought they need to worry about the first year and the last year as I believe you can make £1000 on eBay without disclosing it. 
HRMC could probably check with eBay if necessary and see what they were selling so no point in lying about it.
I wonder what they will decide to do and why they didn't think of tax the year they made 17K.............

I could be wrong but i don't believe that HMRC have any right to ask for, nor Ebay to disclose your trading information.

I believe all HMRC can ask is for YOU to provide a history of your trading. And it looks like I can only see my history for the last 3 years. 

And yes the £1000 limit is revenue, not profit.

It is now declared by ebay once a certain (low ) amount is reached  I understand it is a bit hit and miss, but yes, ebay do provide details of sales to the authorities.

martindow

tightauldgit said:

I could be wrong but i don't believe that HMRC have any right to ask for, nor Ebay to disclose your trading information.

I believe all HMRC can ask is for YOU to provide a history of your trading. And it looks like I can only see my history for the last 3 years. 

And yes the £1000 limit is revenue, not profit.

According to this HMRC have powers to request details from Ebay

https://www.wlhtax.co.uk/news/hmrc-targets-ebay-and-amazon-traders/

You may only be able to see three years history on Ebay but traders should be keeping records.  Bank details will show credits to accounts, but if none can be produced HMRC will 'estimate' figures which will probably not be favourable.

tightauldgit

martindow said:

tightauldgit said:

I could be wrong but i don't believe that HMRC have any right to ask for, nor Ebay to disclose your trading information.

I believe all HMRC can ask is for YOU to provide a history of your trading. And it looks like I can only see my history for the last 3 years. 

And yes the £1000 limit is revenue, not profit.

According to this HMRC have powers to request details from Ebay

https://www.wlhtax.co.uk/news/hmrc-targets-ebay-and-amazon-traders/

You may only be able to see three years history on Ebay but traders should be keeping records.  Bank details will show credits to accounts, but if none can be produced HMRC will 'estimate' figures which will probably not be favourable.

Interesting on the HMRC thing - I wonder what specifically they are sharing. 

On the 3 year thing I just meant if HMRC asked me for records of my "trading" beyond 3 years I wouldn't be able to provide them. And since I'm not a business seller I have no obligation to keep records. So if they challenged me on anything going back beyond that it would be difficult to show them anything definitive. 

TripleH

I'd be careful about selling equipment from a business long since ceased trading. That can still be seen as subject to tax depending on how you ended up with it.

Yes, a spreadsheet with income and expenses on will save cash lot of time and be cheaper than a plastic bag of receipts, but you'll still need evidence of receipts.

Yes, a lot of what accountants do, you can do yourself, many pay for the convenience.

That it has gone to an investigation stage means that HMRC will want detailed answers and won't just accept say travel 35.00 (they'll want to know what makes up that travel) with follow up questions.

If you are selling new or refurbished items, that will be harder to explain away than if you sold second hand items as not a second business.

Accepting the Op may have gone away, the above is for consideration by other users.

Grumpy_chap

tightauldgit said:

I'm not quite sure which way the burden of proof lies in law but I suspect it would be very hard for HMRC to prove that a private individual was actual trading rather than just selling stuff they own 

I suspect the burden of proof lies with the individual.

It may also be obvious by looking at listings.
If an individual lists several of the same item of clothing in different sizes, colours, etc. that would very likely indicate trading.
If an individual lists one each of several different items of clothing and all are the same size (or maybe the same two sizes) that would more likely indicate selling personal items.  

RFW

Grumpy_chap said:

tightauldgit said:

I'm not quite sure which way the burden of proof lies in law but I suspect it would be very hard for HMRC to prove that a private individual was actual trading rather than just selling stuff they own 

I suspect the burden of proof lies with the individual.

It may also be obvious by looking at listings.
If an individual lists several of the same item of clothing in different sizes, colours, etc. that would very likely indicate trading.
If an individual lists one each of several different items of clothing and all are the same size (or maybe the same two sizes) that would more likely indicate selling personal items.  

What would likely happen is that HMRC would send a letter saying they think you should be declaring tax, after that they'd probably send their own assessment and you'd have time to submit accounts. HMRC have their own powers to prosecute and generally speaking if they say you owe tax then you need an accountant to show them you don't.
All that said they're not interested in little people, if they go after someone for being a business they'll probably have a lot of proof that they are and a serious figure in mind. I've never seen a story that HMRC have prosecuted someone for not declaring that they had £1001 of revenue on Ebay. That's a waste of everyone's time.