Hmrc letter

soolin

Hoenir said:

soolin said:

Hoenir said:

Spoonie_Turtle said:

martindow said:

Mr_Countdown said:

I’ve had a letter from HMRC saying they have information showing I’ve earned income from online marketplace sales in tax year ending 5 April 2023. 

I did regularly sell personal possessions and a few bits for friends and family on eBay over the years in my spare time. I’ve no idea though exactly how much or how to respond to HMRC. Is it worth giving them a call and seeing if they have records showing how much?
Also I assume I will have to complete a self assessment form for this period. 

Almost all of the items were things I’d had when I was married. Since I got divorced I  live in a flat I’ve been clearing things out. 

Please no abuse or judging, I just want some advice on how to proceed for the best. 

Thanks.

The only issue is you selling on behalf of others.  Are you keeping a bit back for the trouble of selling for them?  That could be considered I suppose as profit making, but I imagine the amounts involved there will be small.

The threshold at which you'd need to register if you are doing that, OP, is £1,000 in a tax year.

That's £1,000 of net profit. 

Ebay now automatically reports accounts that are have 30 items or more of sales, and/or exceed an annual gross sales value of £1,700 (this excludes any carriage costs and Ebay fees).  Ebay will report to the HMRC the nature of each item sold. 

The £1000 reportable level is gross turnover, not profit. 

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income#trade

If your annual gross income from these is £1,000 or less, you do not need to tell HMRC, unless:…….

That's not what online platforms report. 

https://www.gov.uk/government/news/information-for-online-sellers

The important thing to remember is that the HMRC can charge you a penalty if the records you keep are not accurate, complete and readable or if you do not retain them for the required period of time. 

As has been stated, the reportable limit by online platforms is nothing to do with the trading allowance. It's just a shame that the figures are sort of close enough to be confusing .The £1000 trading allowance has been in force for a few years now, pre the requirement to report. 

Hoenir

soolin said:

Hoenir said:

soolin said:

Hoenir said:

Spoonie_Turtle said:

martindow said:

Mr_Countdown said:

I’ve had a letter from HMRC saying they have information showing I’ve earned income from online marketplace sales in tax year ending 5 April 2023. 

I did regularly sell personal possessions and a few bits for friends and family on eBay over the years in my spare time. I’ve no idea though exactly how much or how to respond to HMRC. Is it worth giving them a call and seeing if they have records showing how much?
Also I assume I will have to complete a self assessment form for this period. 

Almost all of the items were things I’d had when I was married. Since I got divorced I  live in a flat I’ve been clearing things out. 

Please no abuse or judging, I just want some advice on how to proceed for the best. 

Thanks.

The only issue is you selling on behalf of others.  Are you keeping a bit back for the trouble of selling for them?  That could be considered I suppose as profit making, but I imagine the amounts involved there will be small.

The threshold at which you'd need to register if you are doing that, OP, is £1,000 in a tax year.

That's £1,000 of net profit. 

Ebay now automatically reports accounts that are have 30 items or more of sales, and/or exceed an annual gross sales value of £1,700 (this excludes any carriage costs and Ebay fees).  Ebay will report to the HMRC the nature of each item sold. 

The £1000 reportable level is gross turnover, not profit. 

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income#trade

If your annual gross income from these is £1,000 or less, you do not need to tell HMRC, unless:…….

That's not what online platforms report. 

https://www.gov.uk/government/news/information-for-online-sellers

The important thing to remember is that the HMRC can charge you a penalty if the records you keep are not accurate, complete and readable or if you do not retain them for the required period of time. 

As has been stated, the reportable limit by online platforms is nothing to do with the trading allowance. It's just a shame that the figures are sort of close enough to be confusing .The £1000 trading allowance has been in force for a few years now, pre the requirement to report. 

The OP was aware of the rules in April 2024. 

https://forums.moneysavingexpert.com/discussion/6523476/self-assessment-for-hmrc/p1

RFW

As much as everyone is trying to help I think the OP should be looking at seeing an accountant. Search for ones who can help with this and call/email a few and see what they'll charge.
It's not beyond possibility that a canny accountant could end up getting tax back when they look into other payments.

soolin

Hoenir said:

soolin said:

Hoenir said:

soolin said:

Hoenir said:

Spoonie_Turtle said:

martindow said:

Mr_Countdown said:

I’ve had a letter from HMRC saying they have information showing I’ve earned income from online marketplace sales in tax year ending 5 April 2023. 

I did regularly sell personal possessions and a few bits for friends and family on eBay over the years in my spare time. I’ve no idea though exactly how much or how to respond to HMRC. Is it worth giving them a call and seeing if they have records showing how much?
Also I assume I will have to complete a self assessment form for this period. 

Almost all of the items were things I’d had when I was married. Since I got divorced I  live in a flat I’ve been clearing things out. 

Please no abuse or judging, I just want some advice on how to proceed for the best. 

Thanks.

The only issue is you selling on behalf of others.  Are you keeping a bit back for the trouble of selling for them?  That could be considered I suppose as profit making, but I imagine the amounts involved there will be small.

The threshold at which you'd need to register if you are doing that, OP, is £1,000 in a tax year.

That's £1,000 of net profit. 

Ebay now automatically reports accounts that are have 30 items or more of sales, and/or exceed an annual gross sales value of £1,700 (this excludes any carriage costs and Ebay fees).  Ebay will report to the HMRC the nature of each item sold. 

The £1000 reportable level is gross turnover, not profit. 

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income#trade

If your annual gross income from these is £1,000 or less, you do not need to tell HMRC, unless:…….

That's not what online platforms report. 

https://www.gov.uk/government/news/information-for-online-sellers

The important thing to remember is that the HMRC can charge you a penalty if the records you keep are not accurate, complete and readable or if you do not retain them for the required period of time. 

As has been stated, the reportable limit by online platforms is nothing to do with the trading allowance. It's just a shame that the figures are sort of close enough to be confusing .The £1000 trading allowance has been in force for a few years now, pre the requirement to report. 

The OP was aware of the rules in April 2024. 

https://forums.moneysavingexpert.com/discussion/6523476/self-assessment-for-hmrc/p1

Thank you, that does change my advice then. Since OP has stated they are a reseller then they need to respond positively to the HMRC and register and follow all the advice given on that earlier thread. As is stands this is now urgent as it's gone from a late return to potentially an investigation by HMRC. 

OP please refer to the advice on your earlier thread, due to the urgency of this I suggest you follow RFWs advice and approach an accountant .

TripleH

It's better to be proactive here and communicate as soon as possible. Getting an accountant in to sort it out in this scenario is sensible.

HMRC don't go away easily (they may be slow, yes but silence doesn't mean the matter is dead).

If you try to evade dealing with them, they will launch an investigation and may here start probing everything going through your bank accounts from a position that any money in is taxable income from which you have to argue otherwise.

Trying to do this on the cheap (without an accountant) is unwise unless you have all paperwork.

Also, they can extend their investigation further if they suspect there are issues.

LITRG

Hi
We have recently written a news article covering what to do if you receive a letter from HMRC about your online marketplace selling: https://www.litrg.org.uk/news/hmrc-nudge-letters-income-online-marketplaces-5-april-2023-what-you-need-do 
Hope you find it helpful.

Official Company Representative

I am an official representative of LITRG (Low Incomes Tax Reform Group) part of the Chartered Institute of Taxation who are an educational charity. We are not part of MSE or HMRC. MSE has given permission for me to post on the Forum but this does NOT imply any form of approval of my organisation or its products by MSE. We can’t give individual advice, but 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. If you believe I am posting inappropriately please report it to forumteam@moneysavingexpert.com

soolin

LITRG said:

Hi
We have recently written a news article covering what to do if you receive a letter from HMRC about your online marketplace selling: https://www.litrg.org.uk/news/hmrc-nudge-letters-income-online-marketplaces-5-april-2023-what-you-need-do 
Hope you find it helpful.

Official Company Representative

I am an official representative of LITRG (Low Incomes Tax Reform Group) part of the Chartered Institute of Taxation who are an educational charity. We are not part of MSE or HMRC. MSE has given permission for me to post on the Forum but this does NOT imply any form of approval of my organisation or its products by MSE. We can’t give individual advice, but 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. If you believe I am posting inappropriately please report it to forumteam@moneysavingexpert.com

Thank you, that is very useful. If I may, I will bookmark it for any other query threads. 

LITRG

soolin said:

LITRG said:

Hi
We have recently written a news article covering what to do if you receive a letter from HMRC about your online marketplace selling: https://www.litrg.org.uk/news/hmrc-nudge-letters-income-online-marketplaces-5-april-2023-what-you-need-do 
Hope you find it helpful.

Official Company Representative

I am an official representative of LITRG (Low Incomes Tax Reform Group) part of the Chartered Institute of Taxation who are an educational charity. We are not part of MSE or HMRC. MSE has given permission for me to post on the Forum but this does NOT imply any form of approval of my organisation or its products by MSE. We can’t give individual advice, but 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. If you believe I am posting inappropriately please report it to forumteam@moneysavingexpert.com

Thank you, that is very useful. If I may, I will bookmark it for any other query threads. 

Yes of course. 

Barnes107

Just wondering if somebody could help me please. 

I've had the same letter....

I've been clearing the contents of my parents house, the attic, my brother's belongings, my own items, junk, clutter....but also a fair bit of bootsale stuff that I realise make some money after finding my brother's items had sold for a few quid. This has taken me a long time as I work full time, and I take a bootfull of items from my parents house every couple of months when I visit. 

Anyway.... I didn't realise that this was considered trading, but now do!! I've explained this to HMRC and said that I will make a voluntary disclosure. 

My question is..... Do I need to declare ALL income from the eBay sales to match their records....OR just the items that were considered trading??? I'm worried that they will see a £8k figure for example, yet I'm only declaring say 3k that was taxable income...... I'm worried they will think I'm being dishonest or hiding something 

Its an absolute nightmare, as I have to go through every single item that I've sold and somehow distinguish what was taxable and non taxable.....then remember or estimate what I paid for bootsale items as I have no receipts or proof of purchase as it is all cash!! 

I just don't know how I'm going to be able to do this and I'm so so worried about it all that I'm not sleeping and it's making me terribly anxious!  

As stated, Im more than happy to pay what I now know I owe, but I just want it gone, and to have no hiccups!!!

Any info or help would be much appreciated. 

Thank you 

soolin

Barnes107 said:

Just wondering if somebody could help me please. 

I've had the same letter....

I've been clearing the contents of my parents house, the attic, my brother's belongings, my own items, junk, clutter....but also a fair bit of bootsale stuff that I realise make some money after finding my brother's items had sold for a few quid. This has taken me a long time as I work full time, and I take a bootfull of items from my parents house every couple of months when I visit. 

Anyway.... I didn't realise that this was considered trading, but now do!! I've explained this to HMRC and said that I will make a voluntary disclosure. 

My question is..... Do I need to declare ALL income from the eBay sales to match their records....OR just the items that were considered trading??? I'm worried that they will see a £8k figure for example, yet I'm only declaring say 3k that was taxable income...... I'm worried they will think I'm being dishonest or hiding something 

Its an absolute nightmare, as I have to go through every single item that I've sold and somehow distinguish what was taxable and non taxable.....then remember or estimate what I paid for bootsale items as I have no receipts or proof of purchase as it is all cash!! 

I just don't know how I'm going to be able to do this and I'm so so worried about it all that I'm not sleeping and it's making me terribly anxious!  

As stated, Im more than happy to pay what I now know I owe, but I just want it gone, and to have no hiccups!!!

Any info or help would be much appreciated. 

Thank you 

You declare your trading income only - and if that is below £1000 gross then tell HMRC that. However, be prepared to be asked to prove it, as re selling is popular and HMRC are aware of the usual responses.

A photo of a cluttered house, or old receipts showing items bought new and then used by you for example. If in doubt, speak to an accountant.