HMRC ruling on eBay/ Etsy etc

km1500

to be honest it is not rocket science - it is the intent that matters

you can sell a million pounds worth of your personal possessions on eBay are not be liable for a penny in tax

however if you go scouring car boot sales and buy a £10 jumper with the specific intent of reselling it for £20 then that is trading and will count towards your annual limit.

RFW

km1500 said:

to be honest it is not rocket science - it is the intent that matters

you can sell a million pounds worth of your personal possessions on eBay are not be liable for a penny in tax

however if you go scouring car boot sales and buy a £10 jumper with the specific intent of reselling it for £20 then that is trading and will count towards your annual limit.

Not wanting to add to the confusion but you could be liable for capital gains tax on large sums. That said if you are selling a million pounds worth of personal possessions you could probably afford a half decent accountant!

moonpenny

km1500 said:

to be honest it is not rocket science - it is the intent that matters

you can sell a million pounds worth of your personal possessions on eBay are not be liable for a penny in tax

however if you go scouring car boot sales and buy a £10 jumper with the specific intent of reselling it for £20 then that is trading and will count towards your annual limit.

this is what I find confusing - if you buy a jumper with the intention to sell it for more than you paid how would ebay know what you paid for it in the first place?

I would like to list some of my unwanted clothes and a couple of Handbags that in effect are "New" (never used /worn) though not recently bought.  I cant even remember what I paid for them.
 Because I would list as "New" would that be flagged as trading? and what if a mixture of personal items "new and used" were listed over the year?  Would there be a problem with the "New" title.

RFW

moonpenny said:

km1500 said:

to be honest it is not rocket science - it is the intent that matters

you can sell a million pounds worth of your personal possessions on eBay are not be liable for a penny in tax

however if you go scouring car boot sales and buy a £10 jumper with the specific intent of reselling it for £20 then that is trading and will count towards your annual limit.

this is what I find confusing - if you buy a jumper with the intention to sell it for more than you paid how would ebay know what you paid for it in the first place?

No one would know and, largely speaking, no one cares. It's if you do it a lot that the problems start. It's mostly common sense, a couple of dozen jumpers a week won't make an impact anywhere. The same amount per week you probably would have questions to answer. In that case, though, you are a trader and should be keeping records of what you've paid and accounting for it.

There are grey(ish) areas but HMRC have, and continue, to rely on honesty. So if you buy a jumper and think "I could maybe wear that but I could probably earn a tenner on it if I sell it" are you a trader if you get home try it on, don't like it and then sell it?

RFW

moonpenny said:

I would like to list some of my unwanted clothes and a couple of Handbags that in effect are "New" (never used /worn) though not recently bought.  I cant even remember what I paid for them.
 Because I would list as "New" would that be flagged as trading? and what if a mixture of personal items "new and used" were listed over the year?  Would there be a problem with the "New" title.

They're probably not ideally classed as "new" anyway. I know there are different item specifics in different categories. They'd likely be "New (other)" where you could specify when you bought and whether ever used. So the new title may be a problem for other areas beyond anything flagging you up for tax.

You won't get flagged as a trader under those circumstances. Ebay do have some variations as to who is classed as a business seller but that is independent of anything being declared to HMRC.

Spoonie_Turtle

moonpenny said:

km1500 said:

to be honest it is not rocket science - it is the intent that matters

you can sell a million pounds worth of your personal possessions on eBay are not be liable for a penny in tax

however if you go scouring car boot sales and buy a £10 jumper with the specific intent of reselling it for £20 then that is trading and will count towards your annual limit.

this is what I find confusing - if you buy a jumper with the intention to sell it for more than you paid how would ebay know what you paid for it in the first place?

I would like to list some of my unwanted clothes and a couple of Handbags that in effect are "New" (never used /worn) though not recently bought.  I cant even remember what I paid for them.
 Because I would list as "New" would that be flagged as trading? and what if a mixture of personal items "new and used" were listed over the year?  Would there be a problem with the "New" title.

Doesn't matter, the £1,000 trading allowance (for traders) applies to gross receipts not profit.

What your own unwanted possessions cost originally and what they go for is also irrelevant because you're not trading.  And the mix of used and new shouldn't be a problem because you're obviously not sourcing stuff wholesale and reselling. 

It's also pretty easy to tell who is reselling from charity shops because they'll have all sizes and styles of clothes and shoes, whereas someone selling their own or their family's items will consistently have some sizes and not others (even if it's a few different sizes because of different family members, the inconsistency of women's clothes sizing, weight loss/gain, etc., the difference is still clear), they'll probably have broadly consistent styles and tastes amongst the size ranges, and likely other small indications that add up to make a whole picture.

JamTomorrow

I suspect our sales will exceed the HMRC criteria on both volume and value and whilst primarily made up of reselling our old items it will also include a few flips of charity shop and car boot purchases.  Can losses on reselling of old items be offset against profits on flipped items?

As a higher rate taxpayer it probably makes sense now for us to either set up a new eBay account in my Wife's name  (she is doing most of the ebay sales anyway and has no earnings so any ebay income would be nil rate band) or change the name of my account to her name to preserve the 20 years of good feedback.

Anyone with experience of the latter - is is easy to change names or are there any unintended consequences (eg withdrawal to a different name) that make setting up a new account a better option?

soolin

JamTomorrow said:

I suspect our sales will exceed the HMRC criteria on both volume and value and whilst primarily made up of reselling our old items it will also include a few flips of charity shop and car boot purchases.  Can losses on reselling of old items be offset against profits on flipped items?

As a higher rate taxpayer it probably makes sense now for us to either set up a new eBay account in my Wife's name  (she is doing most of the ebay sales anyway and has no earnings so any ebay income would be nil rate band) or change the name of my account to her name to preserve the 20 years of good feedback.

Anyone with experience of the latter - is is easy to change names or are there any unintended consequences (eg withdrawal to a different name) that make setting up a new account a better option?

Name changes are notoriously difficult on eBay, it would almost certainly be easier to start afresh with a new account, get a bit of history by buying some small cheap,items and going from there. 

se2020

JamTomorrow said:

I suspect our sales will exceed the HMRC criteria on both volume and value and whilst primarily made up of reselling our old items it will also include a few flips of charity shop and car boot purchases.  Can losses on reselling of old items be offset against profits on flipped items?

As a higher rate taxpayer it probably makes sense now for us to either set up a new eBay account in my Wife's name  (she is doing most of the ebay sales anyway and has no earnings so any ebay income would be nil rate band) or change the name of my account to her name to preserve the 20 years of good feedback.

Anyone with experience of the latter - is is easy to change names or are there any unintended consequences (eg withdrawal to a different name) that make setting up a new account a better option?

No. You can't offset losses on personal items against profit from flipped items. 

It's easy enough to change the displayed ebay username 
https://www.ebay.co.uk/help/account/changing-account-settings/changing-username?id=4198

But a lot of hassle to change bank delete and these will be the details hmrc use rather than the username itself. 
Not really much point changing it for the reasons you want. More useful if you are called 'flowerpotbargins' but have stopped selling plant pots and started selling pet toys.

Just set up another account and use one for personal stuff and the other for flipping. 
Don't worry about feedback as most buyers know they are covered by ebay anyway. 

badmemory

If you are selling personal items & also flipping other items then 2 entities would be wise.  It is fairly obvious on ebay who is trading & who is selling personal items with just a few borderline accounts.  Just look at what they are selling & what they have sold.  I have followed one that has sold one yr olds clothes & toys, then 2 yr old clothes & toys, now 3 yr old clothes and toys,  I am prepared to bet she has a 4 yr old.  I suspect the used jigsaws come from her parents or grandparents.  It won't take HMRC long to sort the wheat from the chaff & it won't take much to argue your point.