Help needed - have I made a big mess?

Skeptical_John

Back in November my mum needed some minor repairs to her house and replace some white goods. She's on a state pension so I suggested I could sell a few things on her ebay account. We started doing this and sold about 2ks worth of used stuff.

During this time I found a good deal on a mobile which I purchased and sold that on eBay and made maybe £80-£100.

This gave me a bit of a taste of what seems to be called 'flipping' and since then I've sold around £15000 worth of stuff on ebay to make maybe £2000-3000. Basically I've turned about 4k in to 7k.

In the back of my head I've been aware that ebay will report this to HRMC and I will need to pay some tax on it which is not an issue.

I've made it complicated because I've been buying the items (my card) and selling them on my mum's ebay account as mine does not have any good level of feedback, she then sends me the ebay money.

I've stopped for now (though its not easy when we need the cash).

I'm concerneed that my mum is going to get a tax bill of £4k as she does not have the receipts, they are in my name, and the income is in her name?

How much of a mess am I in here and what should I do?

For reference my salary is about 30k.

Kind regards

Newbie_John

Can you not take over your mum's eBay account and rename it to you? Then just set up her a new account.

As you've sold over £1000 you'd need to register for self assessment with HMRC and submit it each year.

Continuing as it is now may end up getting you banned on eBay - and for the past, it's possible someone will end up paying extra tax.

Bookworm225

There are 2 ways to approach this:

Option 1 - keep it simple

your mother selling her own personal possessions is one thing - obviously her eBay history will still be able to list everything she has sold. Those sales are subject to capital gains tax but CGT only applies to an individual item if that item itself sells for more than £6,000. Personal possession item that sells for less than 6k is free of any tax
Capital Gains Tax on personal possessions: What you pay it on - GOV.UK
Highly unlikely any of mother's possessions are liable for CGT. Even then, she has a £3,000 CGT allowance anyway.

Turning to "you", anything you purchased with a view to selling is not a personal possession, it is trading stock and "your" profit will be subject to income tax. Establish the total purchase costs and see if that is more than £1,000. If it is then calculate your profit as sales income - purchase cost. If costs are less than £1,000 then claim the £1,000 trading allowance instead and calculate profits as sales - £1,000.

Now to keep it "simple", mother then declares and pays income tax on that profit (assuming she is a taxpayer anyway). 

Mother has then gifted the money to you (no tax on gifts). Does of course fudge the issue that mother did not pay the purchase cost so notionally has a 100% profit on each item sold so money to you should be split between reimbursement of purchase cost and a gift of her (actual) profit on the trading stock

Option 2 - probably valid but might need careful explaining if challenged.

You cannot get around the fact that it is mother's possessions that were sold, so the explanation above still applies to them

However, in this case you are going to claim that the purchased items were actually yours as you paid their purchase cost. The base point here is that the beneficial interest from the trading activity (ie the money) came to you, so the entire activity was actually you, even though the ebay account was not in your name. Therefore, you will do the profit calculation for the purchased items and you will declare the income on your own income tax return (claiming trading allowance or actual costs as applic).

Option 2 keeps the money accounted for by the person to whom it belongs, but of course is muddied by needing to show you are the beneficiary of the trading activity, not your mother. I assume there is a clear audit trail showing the amounts paid over to you and how they relate to the ebay history? Those transfers are not gifts from mother, they are you moving the cash into your own account.

Jeremy535897

Your mother's sales of assets are not trading as she did not buy the items to sell at a profit. As the total proceeds are only £2,000 then there can be no capital gains tax either for the reasons Bookworm 225 lists (to which I would add that if you sell a depreciating asset, which means an expected life of less than 50 years, there is no capital gains tax).
When it comes to you, you are the trader, not your mother. She is merely a nominee, so I am afraid you will have to declare the trading income as your taxable profit. The figures you give mean that Bookworm 225's calculation of actual sales less actual costs will give the best result. If you expend money on delivery, collection, postage, telephone etc you can also deduct those costs. Unfortunately if HMRC look at the Ebay returns they will assume your mother is the trader, so there would have to be some explaining to do, and I would also note that selling through another person's account is forbidden under Ebay's rules.
You should register as self employed (which automatically registers you for self assessment) using form CWF1 by 5 October 2025, assuming you started in November 2024. You will be liable to 20% tax on the profit for 2024/25, due 31 January 2026, on the £2,000 or so profit, assuming your salary is your only other income.

molerat

There was a post here a while back where someone was using his wife's account and she received a tax bill from HMRC, could be a problem here if your mother is receiving any income based benefits.

Nomunnofun1

molerat said:

There was a post here a while back where someone was using his wife's account and she received a tax bill from HMRC, could be a problem here if your mother is receiving any income based benefits.

https://forums.moneysavingexpert.com/discussion/comment/81359358#Comment_81359358