Hmrc letter

soolin

Barnes107 said:

There's probably THOUSANDS of ebayers like myself who have been caught out / caught unaware, and had the letter in the past few weeks. 

I suspect more like hundreds of thousands, I am seeing these initial letters reported all over the various forums. 

Of those that have done the right thing, and disclosed, SURELY HMRC will sort of accept a reasonable disclosure and formal offer of payment without spending hours and hours of time and resource going through an eBay account with a fine tooth comb!! 

If sellers have done 'the right thing' and disclosed then HMRC will already have their properly declared accounts, so no need to catch them out at all. I suspect there will though be a form of 'acceptable agreement' for those now being caught , but there will be no way of knowing what HMRC will consider reasonable, I suspect that at a certain declared amount HMRC will just accept it and raise the necessary tax bill and penalties (if charged). 

I feel it's a sort of "scare tactic" , a "campaign" to ensure ebayers going forward will now DEFINITELY comply to tax rules and get their house in order. 

If tax laws haven't sorted out the issue, then perhaps scare tactics will- and people reading this who haven't been caught but are doing a side hustle may now decide it is quicker and cheaper to declare, so a win win for HMRC.

I suspect more resources will be put into those who have had the letter, and haven't made a disclosure, or are lying and trying to get away with selling traded items on a private account. 

AS above, if people have already properly declared, regardless of their ebay account standing being private or business, then no resources at all are needed to deal with them.

Also, there are so so many grey areas in what's considered trading.  

Very few grey areas, although the bloke down the pub would probably disagree.

It's all a massive minefield 

And as for eBay..... They should have warned or at least prompted me that I was displaying selling patterns consistent with trading.  My PRIVATE eBay account allows for 500 listings a MONTH!!! Where's the sense in that, when you consider they'll report you as a possible trader if you exceed 30 items a year!!!

Most of the responses I have added above, but re your last paragraph.

It doesn't matter what your selling practice 'looks like' the requirement about reporting trading/business income is there in black and white- all of us sellers should already be aware. one of my private accounts has
10,000 limit on quantity of items
£100,000.00 limit

Surely though no one would mistake that with HMRC requirements to register as a business/sole trader? 

The reporting of 30 items a year or more is nothing to do with them thinking you are a business, it is merely a reporting limit. You could be a business with 5 sales a year, or a private seller with 300 items a year. It still doesn't alter the fact that the requirement to declare trading income has always been there, nothing has changed- the only difference now is that HMRC have a scheme to catch out those who are not legally declaring.

Also be aware that it won't necessarily be for just one year, they may want to look at previous years as well to see how long the trading has been going on.

Barnes107

Yeah, well I've already pre-empted that, and told them that some of my 23/24 activity also has aspects of trading, so I'm also disclosing info they haven't even asked for. 
Hopefully, by complying, they'll see that I'm making an effort and being genuine. 

I know that 21/22 and 22/23 are going to cost me a 20% penalty and interest 

Then, I'm also going to need to do a tax return on my 24/25 activity !!!

Definitely the end for me on eBay. 

I'm never selling a single item again 

soolin

Or carry on and just put 20% of any profit away for the tax bill. 

Barnes107

It's a possibility in the future, but until this is rectified, I can't even think of ebaying anymore. And I'm tempted to donate all my remaining items to charity or give somebody else the headache of selling them!! 

I've printed off all of my data, and am going to mark each item as taxable or non taxable. I'll then pay an accountant to help me go through it all and fill in my disclosures. I guess they will look at it more favourably too if they see it's been submitted by a recognised accountant. 

Hopefully we arrive at a figure that the HMRC are happy with, they let me pay, and have this matter sorted smoothly. I literally can't deal with any more stress. 

At this point, I don't care what it costs, I don't even care about making savings and deductable expenses - I just want it over and to be able to sleep at night without worry. 

strawb_shortcake

I'm glad I read this thread, I hadn't quite realised that the £1k was only applicable to traders. 
Pre-empting a house move later this year we are clearing out the attic, 3 months in and we've made nearly £900. 
It's been quite a mixed assortment, some household bits, but also a lot of now collectables, but were our old toys. We inherited thousands of comics and have been selling them on and off over the years, so hoping that doesn't look as if we are traders?
We still have lots more that we'll be keeping, just getting rid of the unwanted ones

soolin

strawb_shortcake said:

I'm glad I read this thread, I hadn't quite realised that the £1k was only applicable to traders. 
Pre-empting a house move later this year we are clearing out the attic, 3 months in and we've made nearly £900. 
It's been quite a mixed assortment, some household bits, but also a lot of now collectables, but were our old toys. We inherited thousands of comics and have been selling them on and off over the years, so hoping that doesn't look as if we are traders?
We still have lots more that we'll be keeping, just getting rid of the unwanted ones

Only traders need the allowance as private sales are not taxable, so don't require it.

Again I can only say I am well out of date, but I always used to advise people to have photos of clutter. Have a collection of fancy teapots for example?- take photos of them on the shelf, have a large stamp collection, photograph the pile of stamp albums in a cupboard. A clothes hoarder, take photos of your bulging wardrobe.

It is simplistic, and of course still no guarantee that HMRC might not ask questions, but a random assortment of things likely to have been left lying around for years is not likely to attract much in the way of a concern for HMRC.

RFW

Barnes107 said:

I've printed off all of my data, and am going to mark each item as taxable or non taxable. I'll then pay an accountant to help me go through it all and fill in my disclosures. I guess they will look at it more favourably too if they see it's been submitted by a recognised accountant. 

So a few years ago I had a VAT compliance check. I'm registered for VAT and everything was in order but it was quite stressful for a while. They contacted me direct and asked for various information, my accountant was not pleased that they were asking me rather than them. My point here is that if you are getting an accountant, which I highly recommend, then let the accountant deal with contacting them. You'll get a much better result with a half decent accountant. Be sure to ask the accountant questions before you use them, they have different areas of expertise.

Pollycat

soolin said:

strawb_shortcake said:

I'm glad I read this thread, I hadn't quite realised that the £1k was only applicable to traders. 
Pre-empting a house move later this year we are clearing out the attic, 3 months in and we've made nearly £900. 
It's been quite a mixed assortment, some household bits, but also a lot of now collectables, but were our old toys. We inherited thousands of comics and have been selling them on and off over the years, so hoping that doesn't look as if we are traders?
We still have lots more that we'll be keeping, just getting rid of the unwanted ones

Again I can only say I am well out of date, but I always used to advise people to have photos of clutter. Have a collection of fancy teapots for example?- take photos of them on the shelf, have a large stamp collection, photograph the pile of stamp albums in a cupboard. A clothes hoarder, take photos of your bulging wardrobe.

It is simplistic, and of course still no guarantee that HMRC might not ask questions, but a random assortment of things likely to have been left lying around for years is not likely to attract much in the way of a concern for HMRC.

I'm half-expecting a letter.
Very much a private seller but have been selling quite a bit of stuff.
Although I have over 15 pairs of footwear listed, they are all different styles and the same size (between 2 and 3.5).
It might sound a lot but I have 10 times that number that I'm keeping (for the moment), all photographed in situ.
I have photos of my silver necklaces and an Excel spreadsheet of when I bought them.
Ditto my Citizen Eco-drive watches.
My wardrobes are bulging with clothes - I have photos of those too.

If HMRC deem me a trader, I'd start donating my stuff directly to a charity shop (I used to do this before eBay) and just sell the more expensive items.

Barnes107

I can't find too much about this online. There aren't that many threads on ebayers who've actually received a HMRC letter. I can see a dozen threads at most. 

If anybody knows of a thread where a small time re-seller/trader has made, or is in the process of making a disclosure , can somebody please point me to it as I feel quite alone in this, and it would be helpful to speak to somebody in a similar position. 

Thanks 

Spoonie_Turtle

I hesitate to recommend it because the site can have people giving some awful advice, but … reddit is often quite helpful for finding others with the same problem or experience in just about any area of life.  Just don't believe everything you read in the comments, double-check any advice given for its legality!