eBay Private Seller - Self Assessment Tax Return??

HBelfast

Thanks everyone, this really is a helpful community 

vacheron

neogeo said:

DullGreyGuy 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. 

You are fine from an income tax perspective... Capital Gains is a different matter

So can a sale at a loss offset against a sale at a gain?
Again, I have no records so not sure I would be able to prove either way - who decides?

Yes, it can. Plus you have a £6000 allowance (falling to £3000 next year) before you need to pay any GGT. Many items are also exempt, wasting assets (almost all "machinery") being a good example. 

se2020

neogeo said:

DullGreyGuy 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. 

You are fine from an income tax perspective... Capital Gains is a different matter

So can a sale at a loss offset against a sale at a gain?
Again, I have no records so not sure I would be able to prove either way - who decides?

You do not "balance the books" if this is a hobby rather than "trading"

HMRC will state that you have been trading then it is up to you to  prove you are not.

If you sell plenty of items at a loss that will look good (ie you are not a trader)
Additionally,  if you list lots of items on 99p start auction you can show you did not intend to make a profit.

What will go against you is if they check your buying history or find a load of card transactions at collectors markets etc.
It's quite common for collectors to buy sets/Job lots of items just to gain one or two that they want for themselves.  Selling the unwanted ones on, especially at a profit, could well look like "trading" and may well have tax due unless you can convince them it is purely hobby use - ie you can show all/most of the profits have just gone back into buying more lego (for yourself) rather than paying for rent/meals out etc..

RFW

se2020 said:
If you sell plenty of items at a loss that will look good (ie you are not a trader)
Additionally,  if you list lots of items on 99p start auction you can show you did not intend to make a profit.

I'm not sure about the listing at 99p auction. If anyone is looking into it they'll be looking at the sale price. There are still a few items that start at 99p that go for the right selling price.

That said this whole business seems a bit crazy, as Soolin and others have pointed out nothing has actually changed. The media reporting has been spectacularly poor, especially at headline level. If I was Ebay and any of their competitors I'd be making sure people knew how it all works for tax purposes. I've spoken to a few personal sellers who just sell unwanted items every so often who now think they're not allowed to, or that it will be too much hassle for tax purposes.

se2020

RFW said:

se2020 said:
If you sell plenty of items at a loss that will look good (ie you are not a trader)
Additionally,  if you list lots of items on 99p start auction you can show you did not intend to make a profit.

I'm not sure about the listing at 99p auction. If anyone is looking into it they'll be looking at the sale price. There are still a few items that start at 99p that go for the right selling price.

That said this whole business seems a bit crazy, as Soolin and others have pointed out nothing has actually changed. The media reporting has been spectacularly poor, especially at headline level. If I was Ebay and any of their competitors I'd be making sure people knew how it all works for tax purposes. I've spoken to a few personal sellers who just sell unwanted items every so often who now think they're not allowed to, or that it will be too much hassle for tax purposes.

No, just starting items at 99p won't get you off the hook alone. 

ebay etc. Will now be sending the final sales amounts directly to hmrc. 
The hmrc computer will look through them and identify people who look like they might be trading. 
If you are not registered with hmrc as a trader you will probably get a letter. 
A few people will get investigated. 
If you get investigated you will have to show you were not trading. 
One piece of "proof" you can use (for example) is showing you listed the items at 99p as your intention was to make space rather than make a profit and the profit was incidental.

If you paid £300 for a collection of 10 lego sets and listed 8 of them individually at £85 each buy-it-now it looks pretty obvious that you intend to make profit and they will want a slice of that pie. 

Money_Grabber13579

DullGreyGuy 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. 

You are fine from an income tax perspective... Capital Gains is a different matter

Unless the proceeds from a single disposal (or linked disposals to the same or connected persons) exceeded £6k, CGT is unlikely to be an issue.  Also, depending on when last year was (last calendar year or last tax year), the gains main be covered by the annual exemption.

RFW

se2020 said:

RFW said:

se2020 said:
If you sell plenty of items at a loss that will look good (ie you are not a trader)
Additionally,  if you list lots of items on 99p start auction you can show you did not intend to make a profit.

I'm not sure about the listing at 99p auction. If anyone is looking into it they'll be looking at the sale price. There are still a few items that start at 99p that go for the right selling price.

That said this whole business seems a bit crazy, as Soolin and others have pointed out nothing has actually changed. The media reporting has been spectacularly poor, especially at headline level. If I was Ebay and any of their competitors I'd be making sure people knew how it all works for tax purposes. I've spoken to a few personal sellers who just sell unwanted items every so often who now think they're not allowed to, or that it will be too much hassle for tax purposes.

No, just starting items at 99p won't get you off the hook alone. 

ebay etc. Will now be sending the final sales amounts directly to hmrc. 
The hmrc computer will look through them and identify people who look like they might be trading. 
If you are not registered with hmrc as a trader you will probably get a letter. 
A few people will get investigated. 
If you get investigated you will have to show you were not trading. 
One piece of "proof" you can use (for example) is showing you listed the items at 99p as your intention was to make space rather than make a profit and the profit was incidental.

If you paid £300 for a collection of 10 lego sets and listed 8 of them individually at £85 each buy-it-now it looks pretty obvious that you intend to make profit and they will want a slice of that pie. 

In theory you're probably right. In practice they don't have the staff to do all that investigating. I recently had a routine "compliance check" and it really didn't involve much. That's for an ongoing business of several years where they know roughly what's going on and how much money is involved. They can't afford to spend time chasing and checking people who might have missed paying a few quid in tax. As far as I can tell it's largely an exercise to scare a few people who might not currently be correctly complying to get them to start sending in returns. They may send some letters/emails but I'd guess it will be those turning over tens of thousands rather than one or two. They'll certainly be starting at the top and working their way down.

As is usually the case the people getting away with not complying will continue to do so and the honest johns will end up paying more than they need.

rollingmoon

It would appear based on this:

https://www.gov.uk/check-additional-income-tax

that the likes of me selling off some of my record collection and other accumulated tat will be unaffected. Probably worth a look if you're still concerned by all this.

ElwoodBlues

se2020 said:

You do not "balance the books" if this is a hobby rather than "trading"

HMRC will state that you have been trading then it is up to you to  prove you are not.

If you sell plenty of items at a loss that will look good (ie you are not a trader)
Additionally,  if you list lots of items on 99p start auction you can show you did not intend to make a profit.

What will go against you is if they check your buying history or find a load of card transactions at collectors markets etc.
It's quite common for collectors to buy sets/Job lots of items just to gain one or two that they want for themselves.  Selling the unwanted ones on, especially at a profit, could well look like "trading" and may well have tax due unless you can convince them it is purely hobby use - ie you can show all/most of the profits have just gone back into buying more lego (for yourself) rather than paying for rent/meals out etc..

That's the thing though - it's quite possible that someone genuinely selling their own personal possessions isn't going to have any proof/records/paper trail to be able to prove that they aren't trading. Why would they? Equally they won't be able to prove how much profit or loss they might have made. How do you prove that collectible vinyl LP that you sold for £500 was a personal possession if you bought it 40 years ago at retail price? You can't prove that you didn't pick it up at a car boot sale last week. You can't prove a negative like this. 

Essentially, anyone who sells over £1000 of their own stuff is going to be open to scrutiny.

I fully appreciate that it's right for HMRC to want to identify traders who aren't declaring it, but is should be pretty easy for HRMC to evidence and prove those. There are plenty of bigger fish to fry though - medium to large companies pulling all sorts of fiddles, yet HMRC seems obsessed with going after the really small fry stuff recently. Low hanging fruit, but must be very labour intensive for relatively small recoveries.

badmemory

ElwoodBlues said:

I fully appreciate that it's right for HMRC to want to identify traders who aren't declaring it, but is should be pretty easy for HRMC to evidence and prove those. There are plenty of bigger fish to fry though - medium to large companies pulling all sorts of fiddles, yet HMRC seems obsessed with going after the really small fry stuff recently. Low hanging fruit, but must be very labour intensive for relatively small recoveries.

But it makes them look as if they are doing something.  No-on seems to be prepared to go after the ones that are really **************.