What the latest with the Inland Revenue

cheggers

After what amount of ebay sells are the tax man after you?

Is it £4000?

5bellies_2

There's no fixed amount, it's down to your personal circumstances.

The Inland Revenue have told all Accountants that all income from their self-employed clients needs to be declared (nothing new!) but they have specifically included Ebay (and other online auctions) in this for the first time.

It really depends on your personal circumstances. If you are selling your own property purely for disposal reasons, there's no real need to declare it. If you're selling what is specifically stock then all sales have to be declared - but it will depend on your own circumstances whether tax will be liable.

As a general rule, while you will only blip on the IR radar if you start making large (>£3000) single transactions as the IR haven't the manpower or time to trace the pennies owed (only the £££££'s), declaring profit on stock sales is always advisiable in the long run.

cheggers

So if I'm selling a load of my own personal belongings on ebay I should be fine, I am not self employed does that matter.

I am only selling stuff I would get rid of normally at a car boot. What if I make more than £4000 in the year, selling my old stuff.

HairyHatMan

As I understand it, if you buy stuff with the intention of selling it on (wether on eBay or ata car boot) then it is classified as taxable income (or even a loss, if you don't make a profit) regardless of the amount or wether or not you are self employed. If you are selling stuff that was bought with the intention of being used, then you need not declare it.

chompie

so if that's the case what can yo claim from the tax man as expenses.

for a start Postage and packing materials, internet connection, printer supplies

and say you buy something for £10 and sell for £12 would you pay tax on the £12 or £2?

just wondering

5bellies_2

cheggers wrote:

So if I'm selling a load of my own personal belongings on ebay I should be fine, I am not self employed does that matter.

I am only selling stuff I would get rid of normally at a car boot. What if I make more than £4000 in the year, selling my old stuff.

It doesn't matter if you're self employed or not if you are only selling your personal posessions. Providing you are selling low value items and can prove if challenged that they were not purchased to make money (like selling hundreds of pairs of shoes rather than two) then it does not matter how much you make, though if you start getting into the thousands then it is probably worth seeking advice from the CAB about your exact situation.

5bellies_2

chompie wrote:

so if that's the case what can yo claim from the tax man as expenses.

for a start Postage and packing materials, internet connection, printer supplies

and say you buy something for £10 and sell for £12 would you pay tax on the £12 or £2?

just wondering

You would be taxed on profit not income.

You would also have to prove, where necessary, that certain items claimed for were used exclusively for the business. Your home internet connection would not necessarily be only used to buy and sell things so you couldn't necessarily claim for the full cost of it.

You can go as far as claim for space used in you own house for storage or office space - but then the IR would have a claim against you should you then sell that asset!

If you are serious about setting up in business, it's always good to seek professional advice.

HairyHatMan

chompie wrote:

so if that's the case what can yo claim from the tax man as expenses.

for a start Postage and packing materials, internet connection, printer supplies

and say you buy something for £10 and sell for £12 would you pay tax on the £12 or £2?

just wondering

That's the idea. Anything you spend to enable you to sell the stuff can be claimed as expenses i.e. the cost of the items in the first place (inc delivery); ebay fees; paypal fees; packaging materials; phone calls; 40 pence per mile for driving to the post office; printer supplies etc etc. As long it is expenditure used in supporting your sales, you can deduct it from your turnover to give net profit. (so, you'd pay tax on less than the £2 in your example)

chompie

so theoretically, if you were to earn £3999 from ebay sales (profit)
and you had no other income.
you could then claim expenses from them, and they would end up paying you.

or can you only claim expenses when you are over £4000 and registered as self employed

HairyHatMan

No, you deduct your expenses from your income (sales) to give profit. If your expenses are greater then your income, you've made a loss and owe no tax. If your profit (after expenses) is less than £4000 (or whatever the first income tax bracket / personal allowance is) and you have no other income, you won't pay any tax either.