Suddenly close to ebay tax threshold

Spoonie_Turtle

rundmc-k said:

I  appreciate the responses. I suppose what I was thinking was, if she is theoretically giving me some items that she bought as gifts, and I choose to sell them on my ebay account in my name and receive the income into my bank account, surely that counts as me trading, not her?

Hypothetically if, genuinely, you were given some items as gifts and you chose to sell them, that wouldn't be trading because you'd be selling your own personal possessions.

If in reality your wife were 'giving' you some of these items she's selling (even if she bought ones specifically to 'give to you'), as 'gifts', and you sold them … I think you probably know you'd have a hard time convincing anyone that was truly the case.  (Especially if HMRC were to look at both your accounts - linked by IP address, registered address, and the fact you are husband and wife - and find yours 'coincidentally' started selling / started selling similar items when she was nearing the trading allowance threshold.)

Ultimately what you choose to do is up to your own conscience, we can only tell you what the rules are.

rundmc-k

Yes I understand what you mean, and thankyou for explaining it clearly. I was just trying to work out whether my suggestion is a legitimate thing to do or not, but I get where you're coming from

RFW

rundmc-k said:

Yes I understand what you mean, and thankyou for explaining it clearly. I was just trying to work out whether my suggestion is a legitimate thing to do or not, but I get where you're coming from

You could probably set it up in such a way as it would be within the law but I doubt it's worth the hassle. From what you've said there wouldn't be that much tax to pay, if any.

martindow

I agree that the tax liability is not likely to be great.  When you sell on Ebay you notice the sales totting up, but you have paid out to buy the items, for postage incurred, possibly bought some packaging and driven to drop off packets.  Your expenses tend to be less visible, but once you subtract them your profit will be much less.  You need to make sure you note down all of the expenses that you incur in running the business, or you will forget and miss out on justifiable expenses and then pay the tax that is due.  

Congratulations on starting a successful business - lots of people fail to manage this.  If you pay tax it is because you have made a profit and you get to keep most of it! 

LITRG

Hello. We are the Low Incomes Tax Reform Group (LITRG), part of the Chartered Institute of Taxation who are an educational charity. We are not part of HMRC or MSE. Although we can’t give individual advice, you might find our article with a flowchart/some FAQs about having a side hustle and the new platform reporting rules useful: https://www.litrg.org.uk/news/more-side-hustle-tax-help. If you require further help, we recommend that you contact a tax adviser, HMRC or one of the tax charities where relevant. You can find more information about where to get help with tax here: https://www.litrg.org.uk/tax-nic/getting-help-tax. Thanks.

Spoonie_Turtle

martindow said:

I agree that the tax liability is not likely to be great.  When you sell on Ebay you notice the sales totting up, but you have paid out to buy the items, for postage incurred, possibly bought some packaging and driven to drop off packets.  Your expenses tend to be less visible, but once you subtract them your profit will be much less.  You need to make sure you note down all of the expenses that you incur in running the business, or you will forget and miss out on justifiable expenses and then pay the tax that is due.  

Just to be clear for the context of the thread:  If someone is making use of the £1,000 trading allowance they don't claim expenses, HMRC just write off the first £1,000 and whatever is left above that is taxable profit.

(That's why people don't have to register unless they have gross income greater than that in a tax year.)

Obviously if it turns into a business large enough for the expenses to be greater than £1,000 then claiming actual expenses becomes the sensible thing to do.

soolin

Spoonie_Turtle said:

martindow said:

I agree that the tax liability is not likely to be great.  When you sell on Ebay you notice the sales totting up, but you have paid out to buy the items, for postage incurred, possibly bought some packaging and driven to drop off packets.  Your expenses tend to be less visible, but once you subtract them your profit will be much less.  You need to make sure you note down all of the expenses that you incur in running the business, or you will forget and miss out on justifiable expenses and then pay the tax that is due.  

Just to be clear for the context of the thread:  If someone is making use of the £1,000 trading allowance they don't claim expenses, HMRC just write off the first £1,000 and whatever is left above that is taxable profit.

(That's why people don't have to register unless they have gross income greater than that in a tax year.)

Obviously if it turns into a business large enough for the expenses to be greater than £1,000 then claiming actual expenses becomes the sensible thing to do.

That's a timely reminder for all of us as I fear that we often don't make it clear to newer posters that they can either claim the £1000 trading allowance OR do a full expense sheet and claim that. 

For those unsure it works like this

Total Income including all postage received for the year by a sole trader = £999 , no need to declare at all 
Total Income including all postage received for the year by a sole trader = £1010 , need to declare but can either take the £1000 trading allowance of, or can do a full expense sheet. So if the £1000 trading allowance is taken of the net taxable figure is £10 and if you still have personal allowances left you wouldn't even pay tax anyway.

The other thing worth noting this is across all sites, so if you take £600 from ebay  and £600 from etsy then your total reportable would be £1200 from which you can either deduct the trading allowance OR actual expenses. I've noted a few people on the Vinted forums in particular thinking they have an allowance against each source of income.

rundmc-k

Thanks everyone for all the helpful responses, it's much appreciated