Do I have to complete a tax return?

bizzle789

Apologies if this is commonly asked or not the right place but I say I made £3,000 on eBay.

£1,750 = sold old items at a loss
£1,250 = sold for profit

I'm aware you get £12,570 tax-free income and £1,000 trading allowance but I'm an unemployed student and nowhere near the £12,570 threshold. I know I don't have to pay tax on my earnings since I'm entitled to the £12,570 as a sole-trader but do I have to submit a self-assessment tax return?

I keep reading online that if you earn over £1,000, you must do a self-assessment but I'm pretty sure they assume you have a job with more than £12,570 of income.

Please advise. Thanks!

Hoenir

Money you made is profit. Not the net proceeds received for selling the items. 

bizzle789

Hoenir said:

Money you made is profit. Not the net proceeds received for selling the items. 

I'm aware, but I'm asking whether I need to complete a tax return given my situation which is unemployed but £1,250 earnings (profit).

nottsphil

If this is not a business then you have made a loss of 500 pounds for Capital Gains Tax purposes. Looks like you could carry this over each tax year and set it against one where you do make a profit!

Mark_d

https://www.gov.uk/check-if-you-need-tax-return

bizzle789

Mark_d said:

<Link Removed>

This says you need to complete a tax return if you earn more than £1,000 in any scenario. If I don't pay tax as my overall earnings is less than £12,570 why do I have to submit a tax return? That is what I'm struggling to understand.

Spoonie_Turtle

What are you selling?  (Edit: I'm not asking specifically, I mean the type(s) of items as set out in the question below.)

You say old items at a loss, and some items for a profit.  Are the latter also old personal possessions, or are they items you've bought to resell?

RFW

bizzle789 said:

Apologies if this is commonly asked or not the right place but I say I made £3,000 on eBay.

£1,750 = sold old items at a loss
£1,250 = sold for profit

I'm aware you get £12,570 tax-free income and £1,000 trading allowance but I'm an unemployed student and nowhere near the £12,570 threshold. I know I don't have to pay tax on my earnings since I'm entitled to the £12,570 as a sole-trader but do I have to submit a self-assessment tax return?

I keep reading online that if you earn over £1,000, you must do a self-assessment but I'm pretty sure they assume you have a job with more than £12,570 of income.

Please advise. Thanks!

If you're a business and turn over more than £1000 in a 12 month period you need to declare tax.

A business (crudely) is seen as someone who buys or makes items to resell. Profit is irrelevant to whether you should declare. Having a job, or not, is also irrelevant.

If you're selling items that you have used yourself and that you purchased to use with no intention to sell them then you are not a business and don't have to declare anything for tax purposes (with the possible exception of capital gains tax on very high amounts).

bizzle789

Spoonie_Turtle said:

What are you selling?  (Edit: I'm not asking specifically, I mean the type(s) of items as set out in the question below.)

You say old items at a loss, and some items for a profit.  Are the latter also old personal possessions, or are they items you've bought to resell?

The £1,250 made was from selling artwork and other crafts for a profit. It was a side hustle to make a bit of cash basically.

I don't consider selling my old used items as a side hustle since I'm not making profit off them because I'm at a loss.

bizzle789

RFW said:

bizzle789 said:

Apologies if this is commonly asked or not the right place but I say I made £3,000 on eBay.

£1,750 = sold old items at a loss
£1,250 = sold for profit

I'm aware you get £12,570 tax-free income and £1,000 trading allowance but I'm an unemployed student and nowhere near the £12,570 threshold. I know I don't have to pay tax on my earnings since I'm entitled to the £12,570 as a sole-trader but do I have to submit a self-assessment tax return?

I keep reading online that if you earn over £1,000, you must do a self-assessment but I'm pretty sure they assume you have a job with more than £12,570 of income.

Please advise. Thanks!

If you're a business and turn over more than £1000 in a 12 month period you need to declare tax.

A business (crudely) is seen as someone who buys or makes items to resell. Profit is irrelevant to whether you should declare. Having a job, or not, is also irrelevant.

If you're selling items that you have used yourself and that you purchased to use with no intention to sell them then you are not a business and don't have to declare anything for tax purposes (with the possible exception of capital gains tax on very high amounts).

So I would only declare £1,250 in my tax return? Am I also correct in saying I don't pay any tax on it because I haven't earned over £12,570?

se2020

bizzle789 said:

RFW said:

bizzle789 said:

Apologies if this is commonly asked or not the right place but I say I made £3,000 on eBay.

£1,750 = sold old items at a loss
£1,250 = sold for profit

I'm aware you get £12,570 tax-free income and £1,000 trading allowance but I'm an unemployed student and nowhere near the £12,570 threshold. I know I don't have to pay tax on my earnings since I'm entitled to the £12,570 as a sole-trader but do I have to submit a self-assessment tax return?

I keep reading online that if you earn over £1,000, you must do a self-assessment but I'm pretty sure they assume you have a job with more than £12,570 of income.

Please advise. Thanks!

If you're a business and turn over more than £1000 in a 12 month period you need to declare tax.

A business (crudely) is seen as someone who buys or makes items to resell. Profit is irrelevant to whether you should declare. Having a job, or not, is also irrelevant.

If you're selling items that you have used yourself and that you purchased to use with no intention to sell them then you are not a business and don't have to declare anything for tax purposes (with the possible exception of capital gains tax on very high amounts).

So I would only declare £1,250 in my tax return? Am I also correct in saying I don't pay any tax on it because I haven't earned over £12,570?

You have a turnover/sales of over £1000 in a year so you do need to submit a tax return.

If you have no other income from anything that takes you over a total income of £12,750 then no tax will be due for this year.

Note: you need to register as self-employed before you can submit a tax return.  If any of the sales were before 6th April this year then the deadline for registration is the 5th October (Tomorrow!) so you best do that sharpish..