eBay Private Seller - Self Assessment Tax Return??

soolin

scottiescott said:

se2020 said:

neogeo said:

Hi,
I am a private seller and have a large collection of Warhammer, Lego, games etc going back almost 20 years (some the last year or so). A change in circumstances forced me to sell a large amount last year on eBay (almost £10k), some I profited, some I lost - no records of purchase prices whatsoever...where does this leave me?

If it's a personal collection you are fine.
Tax is only due on stuff you buy and sell to make money on purpose. 

So what if you are a Collectible Lego enthusiast who buys multiples of an item for a speculative punt that they will increase in value over time, say Lego Star Wars (I seem to remember seeing something about it going up in value) ? Is that considered adding to your Collectible Lego collection or the path to becoming a trader?

I would suggest that enters the realms of business trading. 

Gavin83

scottiescott said:

se2020 said:

neogeo said:

Hi,
I am a private seller and have a large collection of Warhammer, Lego, games etc going back almost 20 years (some the last year or so). A change in circumstances forced me to sell a large amount last year on eBay (almost £10k), some I profited, some I lost - no records of purchase prices whatsoever...where does this leave me?

If it's a personal collection you are fine.
Tax is only due on stuff you buy and sell to make money on purpose. 

So what if you are a Collectible Lego enthusiast who buys multiples of an item for a speculative punt that they will increase in value over time, say Lego Star Wars (I seem to remember seeing something about it going up in value) ? Is that considered adding to your Collectible Lego collection or the path to becoming a trader?

If you're selling multiples of the same set, new & sealed and making a profit from this I think you'll have an extremely hard time convincing HMRC you aren't a trader. Honestly it's because you are a trader at that point.

If the majority of sets you sell are used, a single of copy of each and have come from your own collection then it's far easier to say you're a personal seller.

DullGreyGuy

Spoonie_Turtle said:

DullGreyGuy said:

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 

But even if her late husband did intend to sell them, he evidently didn't do so, and surely that's irrelevant to the poster now selling them?

Going too far down the rabbit hole there @spoonie_turtle, it raises a number of questions around accounting standards, if they'd already been claimed as costs if they do cash accounting and how final tax assessments are done for deceased sole traders. Not something I'd want to opine on 

vacheron

This raises an interesting point as to where the line between selling and capital gains comes into force?

I recently saw an item being sold by Amazon, which due to what I beleive to be a pricing error, was selling for £31 but would usually retail for £250.... so I bought 10! 

These were relisted almost immediately on eBay for a price well below usual retail, but well above what I paid.
I am under no misapprehension that this is trading, and I will declare any sales as such in my tax return this year. 

However, many collectors keep their collection sealed and boxed to preserve the item in as new condition. I am sure many collectable figures and other memorabilia are purchased with at least a nod to potential future value, but if these items were are sold in 15 years’ time for a profit I would consider this a capital gain rather than trading (disregarding for a moment that a toy would probably fall under the 50 year rule, and therefore be exempt, so use something like a baseball card as a more likely example).

However, where does one draw the line between purchase and sale? ten years, three years, one month?

DullGreyGuy

vacheron said:

However, many collectors keep their collection sealed and boxed to preserve the item in as new condition. I am sure many collectable figures and other memorabilia are purchased with at least a nod to potential future value, but if these items were are sold in 15 years’ time for a profit I would consider this a capital gain rather than trading (disregarding for a moment that a toy would probably fall under the 50 year rule, and therefore be exempt, so use something like a baseball card as a more likely example).

However, where does one draw the line between purchase and sale? ten years, three years, one month?

You need to look at the whole picture... do you have them in your display case at home or are they packed away in offsite storage? Do you have 1 of each item or have you bought multiples (not talking about different variants) of the same item?

Clearly the longer you've owned them and the more you can show you've "enjoyed" them during ownership even if its no in the traditional sense of opening them and playing the more it looks like a personal collection not a trader. 

Personally think the whole sole trader thing needs a whole revamp... the Mrs is a prolific crafter but non-professional so has high wastage, lots of half finished projects etc. She sells not to make money but to create space but goes over £1k a year in revenue so reports a loss making trading each and every year which may aswell be on an accrual basis. 

RFW

vacheron said:

However, where does one draw the line between purchase and sale? ten years, three years, one month?

There isn't one. If you buy something to sell, without a plan to use it, then you're trading.

We buy a fair bit of Lego and I never have the intention to trade it as it's hit and miss at best. We do end up with some sets that don't get built, after a year or two I'll check the value and see if they're worth selling. I recently sold one that we've had lying around for almost a decade. No one can possibly know my intention when I bought it. Frankly, though, unless it's high volume and/or turnover no one would really care.

BM-AK

So as this 'reporting' starts for the 2024 tax year, does this mean that if you are a digital platform user (who has sold items for a small profit that tips over the £1,000 annual threshold) you only need to start reporting for the next tax year? Or is it wise to do this now, i.e. for the 2022/2023 tax return due end of January 2024?

Spoonie_Turtle

BM-AK said:

So as this 'reporting' starts for the 2024 tax year, does this mean that if you are a digital platform user (who has sold items for a small profit that tips over the £1,000 annual threshold) you only need to start reporting for the next tax year? Or is it wise to do this now, i.e. for the 2022/2023 tax return due end of January 2024?

If you are a trader with revenue over £1000 for any tax year then you should be registered for self-assessment and reporting it yourself for the relevant year(s) already.

If you are selling your own unwanted personal items then you don't need to do anything.

Bertie129

BM-AK said:

So as this 'reporting' starts for the 2024 tax year, does this mean that if you are a digital platform user (who has sold items for a small profit that tips over the £1,000 annual threshold) you only need to start reporting for the next tax year? Or is it wise to do this now, i.e. for the 2022/2023 tax return due end of January 2024?

If you were trading then I think it's wise, yes. Are they going to come knocking if you don't? Probably not.

Ants1337

I occasionally sell some things I've owned for a while, bike parts, whole bikes etc.   This could go above £1k fairly quickly, but as I've pictures of me riding the bikes this isn't trading.  All the bits are from the churn of keeping up to date with things and are used by myself before sale. 

Although, I have bought a whole bike wanting just the groupset/gears and wheels from it, and then sold on the other parts (frame, forks, saddle etc) so they're not cluttering up the shed.   I didn't buy the bike with a view to making a profit out of breaking it, but the sale of the bits did reduce the final cost of the parts I wanted to keep.    Is this trading?

I do sometimes buy 3 things quite cheaply as I want one of them and then sell the other 2 to cover the costs.  This is trading.

Would it be prudent to set up a second account with Ebay to sell these on.   And also to monitor the sales on that and when approaching £1k/30 items stop until the new year.   Then if there ever is a question on what I'm doing I can show the 2 accounts and have an easier time than trying to prove each sale was or was not a trade.   Everything 'here' was personal, everything 'there' was trading.

Final question.   In the last example of the second account, would my wife be able to set up a second account as well and then continue for another £1k/30 items?