Any eBayers been contacted by Inland Revenue?

skdotcom

Had a letter this week from the Inland Revenue claiming that I was in receipt of a second untaxed income. Phoned them up and it turns out that somehow they have picked up in me selling stuff on eBay.
Quite annoyed, as now they want me to prove exactly what I have sold, even though I have explained i'm just selling stuff from around my house that I don't want. I'm not a power seller, and have only sold about £500 of stuff this year. I don't buy to sell (unlike lots of you on this forum!!), so I feel that I've not done anything wrong.
Has anyone had a similar experience and if so do you have any advice?

mcwarre

The taxman does do this to try and stop people making a living off of eBay and avoiding tax (not you btw).

I may be wrong but isn't up to them to prove that you have not paid sufficient tax rather than you to prove that you have? Innocent until proven guilty.................. (unless you fill in a tax return which means that you have to declare it)

PM me with your email addy and I will ask my Aunt who is a tax accountant.

motorguy

As far as i recall you are guilty until proven innocent with the taxman. They can ultimately decide how much to tax you based on what they "think" you have earned rather than what you have actually earned if you can't prove otherwise.

If you've only sold £500 worth this (tax) year even if this was all profit you'd at worst be liable for maybe 25% tax on this and if its only second hand household stuff you probably wont have much to worry about. If your listings repeatedly list stuff as 'new' thats an indicator you are a trader....

Personally i'd print off as many listings as you can from items you have sold, highlight the fact they were second hand and demonstrate that they were old household items and i'd expect that to be the end of it.

Oh, and i've only ever heard of people being 'shopped' by co workers, neighbours etc rather than the tax man actively seeking you out on ebay... if they do then we're all in trouble!

skdotcom

Not everything I've sold is secondhand. I have sold some stuff that was new, but that was because I'd either bought the wrong thing and couldnt take it back, or it was an unwanted present.

Makes me a bit mad if it was someone I know who has shopped me to the IR.
Have people got nothing better to do with their time.

bleugh

log onto ebay and print off your bills for the past year
as far as i know the tax man is not entitled to !!!!!! all provided it's not your main source of income

there are rules, etc on the inland revenue website,

motorguy

They ARE entitled to a cut of any extra income you make full stop Bleugh. For example if you are on 25K a year and make an extra 10K a year you would have to pay tax as if you were on 35K a year. And that even applies down to relatively small amounts.

I'd still gather up what you can, again unwanted gifts and stuff are probably still ok. If you are absolutely honest with them and give them all the info you have clearly documented, then you should be ok even if they do make you pay a small amount.

If they have any reason to believe you are lying then they will start to make assumptions and tax you accordingly...

Good luck, and yes there are some sad people out there.....

sparky61

Make sure they take ebay fees into account as well.

Poppy9

If you want to take ebay fees into account they will then class you as a trader. This will have implications for NI, home insurance, mortgage as well as income tax.

As has been rightly pointed out you have to declare all income to the IR even if you are on PAYE. Just because they might not send you a tax return every year doesn't mean you are exempt for informing them. If they decide you have avoided tax they will make assumptions for previous years (i.e. they will check when you first registered with ebay etc) and back date it with penalties - so it won't just be 25% of £500. I forget what the penalties are for late payments but they are quite heavy.


I heard from a friend a new unit has been set up to monitor ebay but it's hush hush as they want to catch people out and collect lots of money.

The_Hawk

On the positive side, if you are treated as an eBay trader, then you would also be able to offset any income with legitimate business expenses, e.g. packaging costs, travel expenses in relation to acquiring items, possibly some or all of your PC and printer costs, contribution to electricity bills etc. etc.

Poppy9

The_Hawk wrote:

On the positive side, if you are treated as an eBay trader, then you would also be able to offset any income with legitimate business expenses, e.g. packaging costs, travel expenses in relation to acquiring items, possibly some or all of your PC and printer costs, contribution to electricity bills etc. etc.

Yes but if you do this you will have to inform your mortgage company, home insurers and car insurers.

From experience there was little extra cost from insurers but if you don't tell them and need to claim they will use it as an excuse not to pay up.

The_Hawk

Poppy9 wrote:

Yes but if you do this you will have to inform your mortgage company, home insurers and car insurers.

From experience there was little extra cost from insurers but if you don't tell them and need to claim they will use it as an excuse not to pay up.

Very true. But, of course any such extra costs would also be legitimate business expenses.