eBay Private Seller - Self Assessment Tax Return??

km1500

it is not a new government tax and it is not for selling over £1000

soolin

I’ll ask the forum team to merge this with one of the other many threads already running.

DullGreyGuy

mjb7219 said:

As a very frequent user on Vinted both to buy and sell second hand clothes, I easily have traded over the £1000 as the items I usually buy are pretty high value! The north face, being the biggest.

Now one example of an item I purchased (second hand already) was a North face jacket listed from a seller worth over £150 listed and being sold by this guy as “purchased on Vinted recently himself but only selling on now as it didn’t fit” 

..Precisely how I search and buy many many numerous items on a day to day basis knowing I have the security that if it didn’t fit I could always re-sell on the jacket myself later!

I’d like to know (hypothetically maybe) if everyone who purchases and re-sells this one particular item just happens to have sales over £1000 a year, could potentially we will all be taxed on it? 

Thanks!

You can only be taxed on it if it's a business transaction and then only on the profit and then only if you've exhausted your tax free allowance elsewhere... this change simply gives more data to HMRC to try and detect those that are running a business and not declaring it. 

Inevitably some people with unusual personal habits may end up having questions asked as a result of this new data but HMRC will take the data in the context of the wider data they hold on you. It will then come down to the believability of your story when you claim it's a personal purchase that you are simply disposing of. So you have two different high value jackets in a size M or L that you've bought and resold because they didn't fit is reasonable but if you have 40 identical jackets ranging from XS to XXL and you try to claim the same its because they didn't fit then its likely they won't believe you. 

In my line of work, insurance, we do very similar when looking at claims... does the whole story hang together does it seem likely that the person had 10 Chanel handbags which they don't have any receipts for as they were gifts and they were all in their suitcase that the airline lost. 

Spoonie_Turtle

jon81uk said:

mjb7219 said:

As a very frequent user on Vinted both to buy and sell second hand clothes, I easily have traded over the £1000 as the items I usually buy are pretty high value! The north face, being the biggest.

Now one example of an item I purchased (second hand already) was a North face jacket listed from a seller worth over £150 listed and being sold by this guy as “purchased on Vinted recently himself but only selling on now as it didn’t fit” 

..Precisely how I search and buy many many numerous items on a day to day basis knowing I have the security that if it didn’t fit I could always re-sell on the jacket myself later!

I’d like to know (hypothetically maybe) if everyone who purchases and re-sells this one particular item just happens to have sales over £1000 a year, could potentially we will all be taxed on it? 

Thanks!

There is no new tax, your title is incorrect.

If you are buying items for your own use and then selling what you don't need any longer or doesn't fit, then you are not trading and no tax is due.

Start buying items with the intent to sell for profit and you are a trader. Make more than £1000 profit and you need to declare the income for tax purposes.

So in your example if you bought the item with the genuine intent that if it fits you will wear it, nothing to worry about. But if you are buying many items at low price to try and resell and make money, you need to consider if your income is high enough to be taxed.

Nearly.  It's £ 1,000 gross received, not £1,000 profit.

High enough income to be declared - only profit will (potentially) be taxed.

thermalboyz

Sorry if its been discussed before, I like to buy designers clothings and accessories and sell on ebay my used second hand one. With the price increase and everything so also effected the selling price of the second hand designers stuffs. I know Used / second hand clothings/ accessories are not classed as profit (as i am not selling it for profit and  always below RRP), the question is if within a year I sold for example like £2000 worth transactions (Over the limit of £1000), would it still be liable for tax? Thanks very much.

soolin

thermalboyz said:

Sorry if its been discussed before, I like to buy designers clothings and accessories and sell on ebay my used second hand one. With the price increase and everything so also effected the selling price of the second hand designers stuffs. I know Used / second hand clothings/ accessories are not classed as profit (as i am not selling it for profit and  always below RRP), the question is if within a year I sold for example like £2000 worth transactions (Over the limit of £1000), would it still be liable for tax? Thanks very much.

Used second hand clothing used to be the most commonly caught area of undeclared small businesses, virtually all the people I dealt with as a volunteer were people selling second hand clothes. Strangely many people think selling second hand clothes cannot be a business.

The only criteria as to whether or not you are a business and liable for tax is exactly as has been stated in all the previous responses. If you buy with the intention to resell (RRP is completely immaterial) new or second hand then you are liable to tax. If you are selling off your own unwanted clothing then you are not liable to tax.

Clothes sellers are fairly easy to catch though, hence so many being caught in the past, as someone selling £2000 of  clothes in a single size or perhaps one either way is understandable, however selling all sizes from 6-20 (and beyond) is unlikely to be from the same person.

In the old days one proof we used to suggest was to provide photos of clothing being worn by the seller, perhaps they were party goers and could show they bought a new outfit every single week, but most were fairly obviously commercial as they sold everything, regardless of size or style.

thermalboyz

Thanks @soolin, that's make sense. I bought with the intention to wear it and sell my older things which I didn't used for more than a year. Never bought and sold same design/ size twice as i am not reseller (I just like to fashion). Looks like i am going to take more fit pics just in case for proofs. 

1303postbox

I am selling my late husband's large collection of railway/ diecast models. Would this be classed as personal or trade I sold about £2500 as I don't know what he paid for things I have no idea if any of it is profit. Thanks.

soolin

1303postbox said:

I am selling my late husband's large collection of railway/ diecast models. Would this be classed as personal or trade I sold about £2500 as I don't know what he paid for things I have no idea if any of it is profit. Thanks.

The guidance remains exactly the same as all the explanations already posted, a person selling personal goods is not liable to Income tax.
Have a read of this from MSE
eBay, Etsy, Vinted and more to share your data with HMRC (moneysavingexpert.com)

DullGreyGuy

1303postbox said:

I am selling my late husband's large collection of railway/ diecast models. Would this be classed as personal or trade I sold about £2500 as I don't know what he paid for things I have no idea if any of it is profit. Thanks.

It comes down to the question... why did he buy them?

1) Did he buy them intending to make a profit by reselling them and they've been kept aside for doing so? Will more be bought to do the same again?

2) Did he buy them and play with them/display them and now you just want rid of them because they take up too much space?

Yes answers to 1 suggest its a business, yes answers to 2 suggest its personal artefacts you are selling