Reselling Clothing - under £1k allowance

sidneyyoungblood

A bit of a advice on reselling some new clothing.

The are jackets which were bought from a end of the line clearance shop - I bought them with the intention of keeping a few for myself and them gifting the rest to my relative to sell on if he wants .

There around about 30 jackets all the same and new - around about £700 in value , he has an ebay account for a few years
which he sells he personal items ( nothing new ) and mostly from his kids - he currently is not working.

Would he need to inform anyone or being under the £1k threshold will be ok ?

It is a one off deal -

Thanks

soolin

as far as HMRC is concerned as long as the turnover on all business sales is under £1000 in any tax year the income doesn’t need to be declared. It might be different if benefits are involved.

sidneyyoungblood

https://forums.moneysavingexpert.com/discussion/comment/81865512#Comment_81865512

Thanks … the only benefits are child benefits through the wife working …

ProcessMatters

Just to add a bit of reassurance: the £1,000 trading allowance is about turnover, not profit, and it applies even if the items are new, as long as this really is a one-off and not an ongoing buying-to-resell activity.

Child Benefit paid to your wife wouldn’t be affected by this. The only time it tends to get messy is where someone is on means-tested benefits themselves or it starts to look like regular trading. From what you’ve described, this sounds comfortably within the allowance.

soolin

https://forums.moneysavingexpert.com/discussion/comment/81865829#Comment_81865829

Turnover though includes everything, so if they get £700 for the items, but also get £300 for postage then that’s the allowance reached, and this catches out a lot of people who believe it is just based on profit. The profit on £700 of items would be considerably less.

The other consideration here is when the figures are returned to HMRC by eBay whether the other private sales make the HMRC think they are trading generally, not just on these jackets. However, as I’ve said several times, HMRC aren’t going to investigate everyone as they just don’t have the man power .

Lastly , these should be sold on a business account, not a private account and eBay might just pick up on that and force the change.

beatthebookienet

Staying under the annual threshold would be fine regardless and at this level you probably aren't going to make enough profit to raise concern.

But I'd say if you go over the threshold and you do get investigated, it would be very hard to convice anyone that buying and selling 30 jackets was for personal use. It's quite clear that it's a venture into a trade with the intention to make profit

RFW

Just a point but if you're gifting them to the relative then he is then definitely a business as he's receiving the items with the intention to resell.
If it stays under £1000 gross then that's covered in previous comments.
If he's not working, that's a decent seed stock to start a business anyway. With some advice he may actually be better off doing so, that would depend on his circumstances. You can usually get info from a local library or via local council.