Online sellers offered chance to settle tax bills

antrobus · 30 March 2012 at 2:31PM

Strapped wrote: »

There must be thousands of eBayers who owe tax.

Possibly.

sequence wrote: »

What if you've been trading as a small business undeclared but don't owe tax (below the threshold )?

If the small business is 'undeclared' it is very likely that flat-rate national insurance contributions will be owed (plus fines) even when no tax is owed.

Besides 'not making enough profit' isn't an excuse for not completing a tax return.

pseudopensioner · 30 March 2012 at 4:15PM

Are you 'trading' or not? The whole scenario is a little ambigous to me.
Is the man or woman who attends say three carboot sales in one month to dispose of superflous items deemed to be a trader? Actual monies obtained, are they profit?

Can you dispose of your superflous items on Ebay once a week, twice a year without being a trader/business?

Can't remember the last time I sold at a car boot sale, must be more than five years ago when moving house and the cost to 'remove' certain items was more than their worth., so bought new after moving. However, I have recently sold on Ebay , items being a part of something I purchased for my own use, a couple of years ago and what I have sold were subsequently surplus to my requirements Sales on Ebay may ultimately afford me a profit given the original purchase price. Does this make me a trader/business?

Are we looking at overall numbers of sales or overall monies received within a certain time scale?

I've been a member of Ebay for about six years and buy far more than I sell, Feedback is just over 200 so not a big seller. My selling two 3 seater Chesterfield sofa's for about 99p (cash on collection) I'm sure won't raise any warning flags. However, 4 years ago I purchased an item (300 pieces shall we say) for my own use, it was far cheaper per unit to buy the 300 than to purchase them individually. To date I have used roughly a half of them, may ultimately use more, but , if I now choose to sell the remainder on Ebay and there is a profit, am I a trader/business?

I'm sure the 'private' sellers who are truly operating a business know that they are trading outside of the law. I don't condone this, but thought I'd raise the questions above to hopefully add a little clarity for the genuine private sellers.

antrobus · 30 March 2012 at 4:41PM

pseudopensioner wrote: »

...
Is the man or woman who attends say three carboot sales in one month to dispose of superflous items deemed to be a trader? ...

No

pseudopensioner wrote: »

.
Can you dispose of your superflous items on Ebay once a week, twice a year without being a trader/business?

Yes

pseudopensioner wrote: »

.. I have recently sold on Ebay , items being a part of something I purchased for my own use, a couple of years ago and what I have sold were subsequently surplus to my requirements Sales on Ebay may ultimately afford me a profit given the original purchase price. Does this make me a trader/business?

No

pseudopensioner wrote: »

Are we looking at overall numbers of sales or overall monies received within a certain time scale?

Yes, that is something that HMRC will consider.

pseudopensioner wrote: »

.., 4 years ago I purchased an item (300 pieces shall we say) for my own use, it was far cheaper per unit to buy the 300 than to purchase them individually. To date I have used roughly a half of them, may ultimately use more, but , if I now choose to sell the remainder on Ebay and there is a profit, am I a trader/business?

On the whole, no. So long as you're talking about 300 rolex watches, or something of that kind.

pseudopensioner wrote: »

.
I'm sure the 'private' sellers who are truly operating a business know that they are trading outside of the law....

I'm pretty sure of that as well.

Ambit_miffed · 30 March 2012 at 4:41PM

There isn't going to be any kind of black and white rule which dictates if you are a trader or not.

However,

There will be cases where people cleary are, for any grey area cases, we will need someone with a bit of common sense to review the situation independantly (god help us)

I would assume that there would be some kind of unofficial, rule of thumb criteria that HMRC would be using to pull off an initial list from the like of ebay etc. Lets say anyone who sells over X items per week, continuously for X weeks, which generates at least X amount of income.

I'm sure it will be a prioritised approach, the more you sell and the more income you make, the more tax you owe and therefore the greater the benefit of you being targeted first.

antrobus · 30 March 2012 at 4:44PM

Ambit_miffed wrote: »

There isn't going to be any kind of black and white rule which dictates if you are a trader or not.

....

Not sure whether the'd qualify as 'rules', but HMRC have a lot of material on the subject. They call it 'badges of trade', and have a whole manual on the subject. See http://www.hmrc.gov.uk/manuals/bimmanual/bim20205.htm - the summary is quite useful.

brettcta · 30 March 2012 at 4:47PM

what's the deal where VAT has already been paid on an item?

i.e. i buy X number of items from somewhere and VAT has been paid there and then. does VAT then apply again to the item or is it applied to the profit made on the items?

JCS1 · 30 March 2012 at 9:39PM

brettcta wrote: »

what's the deal where VAT has already been paid on an item?

i.e. i buy X number of items from somewhere and VAT has been paid there and then. does VAT then apply again to the item or is it applied to the profit made on the items?

You can only charge VAT on items that you are selling if you are VAT registered (and assuming the item being sold is VATable anyway, books for example are zero rated)

macfly · 31 March 2012 at 7:18AM

"The department has recruited additional investigators and will pursue those who have failed to declare their earnings and pay up"
Really? After making thousands of staff take early retirement?
One in a thousand will be pulled if you're lucky.

Strapped · 31 March 2012 at 5:30PM

macfly wrote: »

"The department has recruited additional investigators and will pursue those who have failed to declare their earnings and pay up"
Really? After making thousands of staff take early retirement?
One in a thousand will be pulled if you're lucky.

That was kind of my thoughts too. (I'd actually welcome a crack-down because in my categories there are quite a few oh-i'm-not-a-business-really sellers).

HMRC_representative · 2 April 2012 at 11:31AM

soolin wrote: »

Also can I ask whether you are working with any sites to get their assistance with this campaign. There is a thread running currently suggesting that ebay in particular do nothing when unregulated traders are reported to them. (Although I accept this is not just aimed at ebay sellers)

Hi, we have contacted a number of e-marktplace sites to tell them what we are doing. HMRC gets information from a number of places including the public. Where we have a legal right, we obtain information from e-marketplace providers.

Online sellers offered chance to settle tax bills

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