Can (should I) become an ebay business seller?

purplevamp

GadgetGuru said:

the_lunatic_is_in_my_head said:

As an aside it's been hinted at that MVL won't be available to private sellers sometime in the (presumably near) future. 

Finally a good move by eBay. I would welcome this. 

I am a private seller and use MVL to sell off my spare trading cards.  It's easier for the buyer to have them all in one listing as they can then add the ones they want to the "basket" and I'm able to offer a discount on them.  At £1.50 per card and free postage, I'm not raking it in and before the free fees I would get 14p per card.  With no fees to pay I'm still only getting around 70p.

I don't understand the hatred I've seen from business sellers towards genuine private sellers.

soolin

purplevamp said:

GadgetGuru said:

the_lunatic_is_in_my_head said:

As an aside it's been hinted at that MVL won't be available to private sellers sometime in the (presumably near) future. 

Finally a good move by eBay. I would welcome this. 

I am a private seller and use MVL to sell off my spare trading cards.  It's easier for the buyer to have them all in one listing as they can then add the ones they want to the "basket" and I'm able to offer a discount on them.  At £1.50 per card and free postage, I'm not raking it in and before the free fees I would get 14p per card.  With no fees to pay I'm still only getting around 70p.

I don't understand the hatred I've seen from business sellers towards genuine private sellers.

Firstly most of the issues are around the private sellers who are really businesses in disguise, I'm not sure many businesses have a real issue with truly private sellers.

There is already one confirmed change for MVLs for private sellers discussed here which is going to impact your discounting.

MVL discount options being withdrawn from private sellers Jan 2025 — MoneySavingExpert Forum

There are also a lot of rumours that MVLs may be withdrawn entirely at some future point  - but that is still just a rumour.

Remember as well that going forward the buyer will see your prices as higher - so your £1.50 card with free postage will become  about £2.34 with no multi purchase discount possible.

ElefantEd

se2020 said:

Hoenir said:

Given the volumes you are transacting. Then at some point you'll will come onto the HMRC's radar (as they receive data from Ebay that they can connect to taxpayers records).  They'll be very direct and to the point. Won't take any prisoners. Onus will be on you to convince them. Remember that they can back assess prior years on a whim. Imposing penalties and interest on top on any previously underpaid income tax. 

Many of us on here speak with workhats on rather than personal. Been there, seen it, done it , investigated it etc. Not remotely interested in playing games for the reasons I've outlined previously. 

I've no problem with hmrc checking any of it.
I have most of the original receipts for the items so can show that I would actually be making a loss year on year if they did decide I was trading!

Personally I wouldn't become a business seller unless I actually was one - all sorts of additional considerations come into force (never mind any financial issues).

However making a loss doesn't prove you aren't a business - plenty of businesses make losses! The definition is whether you are buying things to sell on, rather than buying them for yourself and then deciding you don't want or need them.

HMRC would be pretty pragmatic about this - lots of different random items, obviously second hand? A private seller. Many similar or identical things? A business.

RFW

ElefantEd said:

HMRC would be pretty pragmatic about this - lots of different random items, obviously second hand? A private seller. Many similar or identical things? A business.

I take the point but there are plenty of ways that the latter would not be a business. There was someone here not long ago who inherited thousands of comics/magazines. They were selling them off. They were not a business. Someone who goes around charity shops picking up random items to resell is a business. The rules are that if you buy or make to resell then it's a business.

HMRC will only take an interest when larger sums are involved. Years ago they sent me a letter asking for me why I'd been selling items and wasn't registered as a business, to either explain that I wasn't or register immediately. I was but used a couple of addresses and they hadn't matched the details, so all was fine. As far as I know not much has changed, except that then they trawled sellers who hit a certain figure and then checked their database. Now they don't have to trawl as they will have the figures to hand. If they do start a purge on sellers I imagine they'd start on high turnover private sellers first, they'll be the lowest hanging fruit, where they'll get a chance to get revenue in.

soolin

RFW said:

ElefantEd said:

HMRC would be pretty pragmatic about this - lots of different random items, obviously second hand? A private seller. Many similar or identical things? A business.

I take the point but there are plenty of ways that the latter would not be a business. There was someone here not long ago who inherited thousands of comics/magazines. They were selling them off. They were not a business. Someone who goes around charity shops picking up random items to resell is a business. The rules are that if you buy or make to resell then it's a business.

HMRC will only take an interest when larger sums are involved. Years ago they sent me a letter asking for me why I'd been selling items and wasn't registered as a business, to either explain that I wasn't or register immediately. I was but used a couple of addresses and they hadn't matched the details, so all was fine. As far as I know not much has changed, except that then they trawled sellers who hit a certain figure and then checked their database. Now they don't have to trawl as they will have the figures to hand. If they do start a purge on sellers I imagine they'd start on high turnover private sellers first, they'll be the lowest hanging fruit, where they'll get a chance to get revenue in.

Strangely around 18-20 years ago I got the dreaded 'do you need to reconsider your tax submission' letter. Mine wasn't for selling but for my other business at the time - which was fully declared and on which tax and NI had already been paid.In those days you could phone up and talk to someone, and we even had a local tax office where I took my accounts and paperwork and actually showed them. Ended up having a lovely chat and a cup of vending machine tea with someone in an office at HMRC who assured me these mistakes happen.

In my case it was a mismatch of terminology, to get it into the right boxes on the self assessment bit of the form (sent in paper forms it was that long ago) I shortened the description - whereas on my paperwork I used the full correct terminology and my name in full and they just hadn't linked the details. They had obviously obtained one of my business cards or piece of paperwork - which implies that someone turned me in, not knowing I was fully registered! 

I agree with you that HMRC will go for the obvious targets first. We know they haven't got a great deal of money invested in this, but a good bot can weed out all the information to raise red flags to be reviewed in person. It is easy enough to go for large volume sellers , or people whose volume across several sites is large and just automatically send out 'enquiry' letters to see what they get back. With automated systems and NI numbers a great deal of info can be machine checked against tax returns.

soolin

ElefantEd said:

se2020 said:

Hoenir said:

Given the volumes you are transacting. Then at some point you'll will come onto the HMRC's radar (as they receive data from Ebay that they can connect to taxpayers records).  They'll be very direct and to the point. Won't take any prisoners. Onus will be on you to convince them. Remember that they can back assess prior years on a whim. Imposing penalties and interest on top on any previously underpaid income tax. 

Many of us on here speak with workhats on rather than personal. Been there, seen it, done it , investigated it etc. Not remotely interested in playing games for the reasons I've outlined previously. 

I've no problem with hmrc checking any of it.
I have most of the original receipts for the items so can show that I would actually be making a loss year on year if they did decide I was trading!

Personally I wouldn't become a business seller unless I actually was one - all sorts of additional considerations come into force (never mind any financial issues).

However making a loss doesn't prove you aren't a business - plenty of businesses make losses! The definition is whether you are buying things to sell on, rather than buying them for yourself and then deciding you don't want or need them.

HMRC would be pretty pragmatic about this - lots of different random items, obviously second hand? A private seller. Many similar or identical things? A business.

Whilst I rarely say too much about what I sell, my business in the past would have passed your definition of 'private' selling with ease. At one point I sold virtually nothing new and nothing in multiples but was a proper business and registered as such. I can currently think of a dozen or more people turning over a very healthy living as a business doing just that. 

ElefantEd

To clarify, I wasn't saying that my definition was the actual definition of being a business (or not), but that I was fairly sure that in the absence of any other data, HMRC would apply that kind of test to decide who to investigate more closely.

soolin

ElefantEd said:

To clarify, I wasn't saying that my definition was the actual definition of being a business (or not), but that I was fairly sure that in the absence of any other data, HMRC would apply that kind of test to decide who to investigate more closely.

I'm not really disagreeing with you, but when I did my voluntary work 90% of people 'caught' were resellers, mainly selling 2nd hand clothes or baby equipment they were buying up in charity shops or at car boot sales. 

RFW

soolin said:

ElefantEd said:

To clarify, I wasn't saying that my definition was the actual definition of being a business (or not), but that I was fairly sure that in the absence of any other data, HMRC would apply that kind of test to decide who to investigate more closely.

I'm not really disagreeing with you, but when I did my voluntary work 90% of people 'caught' were resellers, mainly selling 2nd hand clothes or baby equipment they were buying up in charity shops or at car boot sales. 

I think I read somewhere, possibly on here, where someone was selling second hand baby clothes and was caught out. They were mixing up the ages and genders so it became fairly easy to spot.

I don't know what the best second hand products are for buying and selling but I'd bet that HMRC do, or at least have an AI bot that does.

I've often wondered if everyone who should be registered as a business did if it would actually be beneficial to the government.

Spoonie_Turtle

RFW said:

soolin said:

ElefantEd said:

To clarify, I wasn't saying that my definition was the actual definition of being a business (or not), but that I was fairly sure that in the absence of any other data, HMRC would apply that kind of test to decide who to investigate more closely.

I'm not really disagreeing with you, but when I did my voluntary work 90% of people 'caught' were resellers, mainly selling 2nd hand clothes or baby equipment they were buying up in charity shops or at car boot sales. 

I've often wondered if everyone who should be registered as a business did if it would actually be beneficial to the government.

I would wager yes, as there will undoubtedly be those who do it as a 'side hustle' on top of their usual earnings, so there would be some tax to pay.

Also people on means-tested benefits, even if they don't have taxable income, if it's income from trading they need to declare it because it may reduce their benefit payment (not in all circumstances, but in many) - this applies whether they're registered or not, but if they're not registered chances are they are also not declaring income they should be to DWP.