Business v Private Pros & Cons

red_boots2

Recently I have been selling more and more on eBay and already include the income on my Self Assessment. 

My account is currently a Private account and I am tempted to switch to a Business account.

What are the pros and cons of this?

zackary71

I can tell you the downside. I had a good Private account I built up over 18 years. I decided to try a Business venture and switched to a Business account. Unfortunately, it didn't work out, and I discovered I couldn't switch back to Private. I lost the 18 years of Feedback history and had to start again. 

soolin

red_boots2 said:

Recently I have been selling more and more on eBay and already include the income on my Self Assessment. 

My account is currently a Private account and I am tempted to switch to a Business account.

What are the pros and cons of this?

If you are a business then the main pro is that you would be trading legally and in some instances being properly registered can bring in more sales as a lot of buyers won’t trust wrongly registered businesses. It is sometimes easier to get poor feedback removed , or get issues dealt with by CS. 

The biggest downside is that you will have to pay insertion fees plus FVF offers are very rare for businesses, I can’t recall the last time I got any on my business account. You will also need to accept change of mind returns (I do that anyway even on my private account ) and you will have to publicly show your geographic address.  

GadgetGuru

zackary71 said:

I can tell you the downside. I had a good Private account I built up over 18 years. I decided to try a Business venture and switched to a Business account. Unfortunately, it didn't work out, and I discovered I couldn't switch back to Private. I lost the 18 years of Feedback history and had to start again. 

Had exactly the same experience as this. 

red_boots2

Thanks all, I will stick with the private account!

Appreciate all the advise.

RFW

soolin said:

If you are a business then the main pro is that you would be trading legally and in some instances being properly registered can bring in more sales as a lot of buyers won’t trust wrongly registered businesses.

I've just been looking at a few listings that were clearly business sales and they were private sellers so I passed. They were big lots so I'd rather know who I'm dealing with than risking it.

forgotmyname

100% on business sellers masquerading as private sellers.  I also try to avoid them like the plague, had a couple try to
avoid refunding in the past with feeble excuses.  No I don't believe your a private seller struggling to make ends
meet and only listing items given to you by your family or selling items from a recently passed away relative
when your selling brand new items by the container load and have listings for pre-release items also.

soolin

RFW said:

soolin said:

If you are a business then the main pro is that you would be trading legally and in some instances being properly registered can bring in more sales as a lot of buyers won’t trust wrongly registered businesses.

I've just been looking at a few listings that were clearly business sales and they were private sellers so I passed. They were big lots so I'd rather know who I'm dealing with than risking it.

forgotmyname said:

100% on business sellers masquerading as private sellers.  I also try to avoid them like the plague, had a couple try to
avoid refunding in the past with feeble excuses.  No I don't believe your a private seller struggling to make ends
meet and only listing items given to you by your family or selling items from a recently passed away relative
when your selling brand new items by the container load and have listings for pre-release items also.

Likewise I rarely ever buy from a business seller masquerading as a private seller (see my rant about Body shop reps a few months ago) . I buy a lot of things on eBay, several times a week as since the demise of a lot of smaller hobby type shops it’s the only place to easily get things my OH needs for their hobby, I would actually pay a little more to buy from a registered shop than trust a wrongly registered seller. 

I use private sellers usually for truly second hand things, collectables, bits of vintage Nick nacks that take my fancy, clothes for the grandchildren (I got a lovely bundle of coats and jackets recently at virtually next to nothing). 

Spoonie_Turtle

Until a couple of years ago I wasn't aware there was this problem but thanks to this board I do now, so I also avoid businesses registered as private sellers.  I thankfully haven't had problems with any in the past, but it's the principle of it and I won't support sellers blatantly doing the wrong thing. 
(Same with mass-produced stuff on Etsy, I'll only buy if it's handmade, vintage, or a genuine craft supply which is also specifically allowed.)

soolin

zackary71 said:

I think the new HMRC changes will put the cat amongst the pigeons and bring overdue changes on eBay...hopefully for the better. It's always been a position in the past where if Sellers knew they would get get away with a Private status, despite holding £50k of stock in listings...they would do. 
For me, it's a bit of a grey area, as having got the selling bug recently, I do well reselling on top of a full time job. I always have under 100 listings and get the 70% off FVF offers. So I guess from eBay's viewpoint, I'm not a prolific enough seller to be classed as a Busines. However, I recognise I am liable under the new 'changes' (though I know that's not the right word) and will be doing my 1st ever self assessment for 2023/24 shortly.

Once again as has been stated over and over, nothing has changed re HMRC tax rules. 

EBay is not HMRC and HMRC is not eBay so it is possible to be a business on eBay selling legally through a business account but not be subject to tax or NI. There is no grey area, selling as a business requires sellers to conform to certain rules, including a visible geographic address which is not possible on an eBay private account. There is no lower limit, you don’t suddenly become a business once you’ve sold 10/20/30 items . The badges of trade is clearly outlined if you check HMRC.

The moment you bought to resell you became a business and therefore should not be using a private account and would not be eligible for the FVF offers. Your tax status is an entirely separate matter, and whilst it has been covered over and over again on here, sellers have a trading  allowance of £1000 that is turnover not profit but that is an HMRC allowance and nothing to do with eBay. 

red_boots2

Thanks all, this is giving me a lot to consider.

I don't resell 'as such' I do a lot of product testing in exchange for keeping the item and then if I don't use it tend to sell it or give it away depending on the value of similar listings on eBay.

Would you say it is worth me changing to a business account? I tend to sell 10-20 things a month.

In terms of how I refund if the case arises; I just refund and don't bother asking for the item back as it didn't cost me anything in the first place