Hmrc - ebay/airbnb/vinted etc new rules - 1st Jan 2024

[Mercenary Keyboard Warrior]

This is where the whole intent thing can get tricky. One of the insane things I do is I seek out the cleanest copies of out-of-print CDs of titles I want. The problem is that used CDs not as described a lot, and when buying from certain marketplaces, you have to return the item on your dime in case of a dispute. I've lately been buying Japanese CDs, from Japan -- too expensive to return, and too expensive to buy and have shipped one by one. So I would buy a few copies of the same title and have them shipped together. Then I pick out good copies and list the ones that don't meet my standards for sale. The intent surely isn't to re-sell for profit; the intent is to buy a few good copies for my personal collection and personal use and let go of the bad apples because I have no use for them and recuperate as much as I can (because each CD adds to shipping cost, plus there's handling for the guy in Japan who accepts all CDs from disparate sellers and then sends them all to me in a single package).
And another situation is where I have a less-than-ideal copy from earlier, "upgrade" it by buying a better one, and then once the "upgrade" arrives, sell the old one.

Where would I even begin explaining the intent to HMRC? I know this is not a normal scenario on this planet, but it's not an imaginary one. And the impact of that on my bank account has prompted me to sell off even some of the copies that I bought as "upgrades" (which even further make it look like a flip-job).

Maybe the key ingredient here is that the intent is to buy good copies for personal use, but due to how the used CD thing works, I know that some will be in inferior condition to what I'm lead to believe by the seller, that is not fit for [my] purpose, and I'm prepared to deal with that by selling the bad ones. Sort of like what I see on Guitar forums: people take a chance on guitar sold on eBay and go into it "it's just 1,500 quid -- if it's not good, I'll sell it". Instead, a CD doesn't cost 1,500 quid, so I buy them in greater quantities... So I wonder what HMRC would think about that....

I would say they would consider your intent is to trade, you just don't know specifically which items your buying will be to trade on and which are for your benefit.
Bear in mind your only going to be taxed on profits. So if you imported £10k of used CDs and then sold £9k worth which you can fairly say cost £9k there is no tax due. Just some minor reporting of purchase and sale.

 

[andybird123]

But the problem here: are they going to just take your word for it? "I'm just selling some personal items", "oh, ok, you're free to go, sorry to have bothered you, sir". Wouldn't that be the first thing someone who's trying to avoid paying tax say?

Which brings me to: how do you actually PROVE you didn't buy that stuff to flip?

Do you have any method of showing how much you bought stuff for and when?

Also, if you do go over the £1k in sales and just fill in a tax return declaring no profit then HMRC simply don't have the manpower to investigate every single person, the chances of you being investigated in the first place is infinitesimally small.

They'll have an automated system set up to send letters out to people over the £1k who make no attempt to fill in a tax return and may even try fining people based off the number eBay give them, but if you fill one in and declare no profit (for whatever legitimate reason), I very much doubt they will send the boys round.

If they think you are trading they would still have to have some sort of proof beyond just "he's sold a few cd's on eBay". If your description of the situation is accurate then I assume your not actually making a profit on the bad ones you sell on either so there wouldn't be anything to tax.

The rule used to be simply that if you aren't "trading" with the intent to make a profit then you don't need to fill in a tax return. The new rule appears to be that if you do over £1k on eBay then you do have to fill in a tax return and just mark it zero profit.

 

[ristac]

If they want to trap a few non tax paying traders, get on FB market place and snag a few of the car traders

 

[Manbatius]

Torn on mine, so my ebay is £1200 in 2023.

About £80 is stuff I have repaired and sold.

The rest is all personal stuff etc
GPU, CPU mobile phone, Oled switch.

I have receipts for all of these (some are from here) reasonably confident I can trace enough of the £1000.

Is the wisest thing to do just complete a tax return with proft £80?
I don't want to stop selling in the middle of whittling down my consoles, some of the old stuff may be difficult to quantify/explain though like my old gamecube. Though going back I have stated in most listings how long I have had the stuff for. May save them out into a folder. Not sure I prove the gamecube thats been in the loft for years is not a flip hah.

 

[Jono8]

Torn on mine, so my ebay is £1200 in 2023.

About £80 is stuff I have repaired and sold.

The rest is all personal stuff etc
GPU, CPU mobile phone, Oled switch.

I have receipts for all of these (some are from here) reasonably confident I can trace enough of the £1000.

Is the wisest thing to do just complete a tax return with proft £80?
I don't want to stop selling in the middle of whittling down my consoles, some of the old stuff may be difficult to quantify/explain though like my old gamecube. Though going back I have stated in most listings how long I have had the stuff for. May save them out into a folder. Not sure I prove the gamecube thats been in the loft for years is not a flip hah.

I don't believe they started collecting till 1st Jan 24, and then dont have to report till 2025.

As far as i am aware, they won't be reporting 2023 stuff.

2024 stuff might still fall in the 23/24 tax year though.

 

[413x]

I don't believe they started collecting till 1st Jan 24, and then dont have to report till 2025.

As far as i am aware, they won't be reporting 2023 stuff.

2024 stuff might still fall in the 23/24 tax year though.

This is what almost every news outlet is reporting. And it clearly says "from 1st Jan 2024".

I suspect if they saw 800 quid in sales between now and April and they were diligent they'd check the rest of the tax year.

 

[Jono8]

I suspect if they saw 800 quid in sales between now and April and they were diligent they'd check the rest of the tax year.

Possible. However, I'm not sure where that falls in the organisation's obligations to collect and report and/or whether they would bother. ebay don't give a **** about what the UK tax man gets. Working out who has a lot of sales between now and April and then going back through all those accounts of their own volition to find a pattern is just loads of extra work for them.

They will all no doubt do the bare minimum of what is required of them by law.

 

[Kenai]

Torn on mine, so my ebay is £1200 in 2023.

About £80 is stuff I have repaired and sold.

The rest is all personal stuff etc
GPU, CPU mobile phone, Oled switch.

I have receipts for all of these (some are from here) reasonably confident I can trace enough of the £1000.

Is the wisest thing to do just complete a tax return with proft £80?
I don't want to stop selling in the middle of whittling down my consoles, some of the old stuff may be difficult to quantify/explain though like my old gamecube. Though going back I have stated in most listings how long I have had the stuff for. May save them out into a folder. Not sure I prove the gamecube thats been in the loft for years is not a flip hah.

As you're not anywhere near breaching your £1000 trading allowance, unless you'll trigger the 30 sales / €2000 platform reporting threshold, then I wouldn't be doing anything.

Also,as others say, I've only seen mention of collecting from Jan 24 to report to HMRC in Jan 25. The fact that this doesn't really align with the tax year also makes me think they're only using the data as a starting point to try and spot traders to go after, rather than specifically align your sales data to a reporting period etc.

 

[413x]

Possible. However, I'm not sure where that falls in the organisation's obligations to collect and report and/or whether they would bother. ebay don't give a **** about what the UK tax man gets. Working out who has a lot of sales between now and April and then going back through all those accounts of their own volition to find a pattern is just loads of extra work for them.

They will all no doubt do the bare minimum of what is required of them by law.

It probably wouldn't happen. I suspect it would only happen if there was automation set up.

Ie "if sold items > 800 between 1st Jan and 4th April = human check"

It would certainly have to be automated. No ones gonna trawl through that.

In reality I suspect it's mainly giving some warning this is happening tax year 2024-2025.

Who knows.. It may even just be to scare people into it.

 

[Jono8]

Also,as others say, I've only seen mention of collecting from Jan 24 to report to HMRC in Jan 25. The fact that this doesn't really align with the tax year also makes me think they're only using the data as a starting point to try and spot traders to go after, rather than specifically align your sales data to a reporting period etc.

Yeh. They will probably collect it and see if they are getting people that are repeatedly breaching those thresholds in consecutive tax years. Someone having a big clear out/turn out one year is one thing. Doing it repeatedly likely means they arent just selling old stuff/having a clear out and are instead trading.

 

[Mercenary Keyboard Warrior]

So for context, it may help;
If your into crypto when the main reporting kicked in there they (exchanges mainly) told you via email that they were reporting activity £x by agreement with HMRC.
HMRC then send a letter saying, we have been told by XXXX that you have used their platform and have exceeded £x. (based on deposits iirc not sales)
You are required to advise us if Z applies to you. Z being a profit exceeding your potential allowance, or if you basically know you should have paid tax.
If you do not understand we suggest seeking the advice of a tax advisor to ensure you are compliant.

I would expect Ebay etc will end up along the same lines.
Give HMRC data for people who exceed an arbitrary amount no matter what they have sold. Say £1250.
HMRC will send a letter to all those people saying if your trading and its exceeded £1k you must report, if you have sold personal items you may be liable.
But in both cases if you are unsure seek tax advice.
That way HMRC undertake little work. They have warned you, so should it later be found you should have paid tax they will likely be able to ignore the statute limiting time as they will say you consciously didn't pay tax as opposed to unwittingly didn't pay tax.

 

[413x]

So for context, it may help;
If your into crypto when the main reporting kicked in there they (exchanges mainly) told you via email that they were reporting activity £x by agreement with HMRC.
HMRC then send a letter saying, we have been told by XXXX that you have used their platform and have exceeded £x. (based on deposits iirc not sales)
You are required to advise us if Z applies to you. Z being a profit exceeding your potential allowance, or if you basically know you should have paid tax.
If you do not understand we suggest seeking the advice of a tax advisor to ensure you are compliant.

I would expect Ebay etc will end up along the same lines.
Give HMRC data for people who exceed an arbitrary amount no matter what they have sold. Say £1250.
HMRC will send a letter to all those people saying if your trading and its exceeded £1k you must report, if you have sold personal items you may be liable.
But in both cases if you are unsure seek tax advice.
That way HMRC undertake little work. They have warned you, so should it later be found you should have paid tax they will likely be able to ignore the statute limiting time as they will say you consciously didn't pay tax as opposed to unwittingly didn't pay tax.

This would be a sensible/clear way of doing it tbh.

 

[Kenai]

I would expect Ebay etc will end up along the same lines.
Give HMRC data for people who exceed an arbitrary amount no matter what they have sold. Say £1250.

30 sales or €2000 is when the platforms will be expected to tell HMRC.

 

[Mercenary Keyboard Warrior]

30 sales or €2000 is when the platforms will be expected to tell HMRC.

Yeah I saw those numbers but wasnt sure if they were set in stone
For example on the crypto side they did vary by exchange
I thought the agreed global limit was €1750 but maybe that was GBP £1750

 

[slinxy]

So for context, it may help;
If your into crypto when the main reporting kicked in there they (exchanges mainly) told you via email that they were reporting activity £x by agreement with HMRC.
HMRC then send a letter saying, we have been told by XXXX that you have used their platform and have exceeded £x. (based on deposits iirc not sales)
You are required to advise us if Z applies to you. Z being a profit exceeding your potential allowance, or if you basically know you should have paid tax.
If you do not understand we suggest seeking the advice of a tax advisor to ensure you are compliant.

…

this is the same for the stock trading platforms that I use, I’m fairly certain that I had to give my NI number and tell them my gross salary at the time of joining.. so they can basically report back my capital gains, dividends and interest, while work out my taxes.

I just received a message from one of the trading platforms saying that they will no longer be holding taxes from interest now…

 

[Tefal]

This isn't actualy a new rule is it? 1k has always been the occasional trading limit?

 

[Tefal]

This is where the whole intent thing can get tricky. One of the insane things I do is I seek out the cleanest copies of out-of-print CDs of titles I want. The problem is that used CDs not as described a lot, and when buying from certain marketplaces, you have to return the item on your dime in case of a dispute. I've lately been buying Japanese CDs, from Japan -- too expensive to return, and too expensive to buy and have shipped one by one. So I would buy a few copies of the same title and have them shipped together. Then I pick out good copies and list the ones that don't meet my standards for sale. The intent surely isn't to re-sell for profit; the intent is to buy a few good copies for my personal collection and personal use and let go of the bad apples because I have no use for them and recuperate as much as I can (because each CD adds to shipping cost, plus there's handling for the guy in Japan who accepts all CDs from disparate sellers and then sends them all to me in a single package).
And another situation is where I have a less-than-ideal copy from earlier, "upgrade" it by buying a better one, and then once the "upgrade" arrives, sell the old one.

Where would I even begin explaining the intent to HMRC? I know this is not a normal scenario on this planet, but it's not an imaginary one. And the impact of that on my bank account has prompted me to sell off even some of the copies that I bought as "upgrades" (which even further make it look like a flip-job).

Maybe the key ingredient here is that the intent is to buy good copies for personal use, but due to how the used CD thing works, I know that some will be in inferior condition to what I'm lead to believe by the seller, that is not fit for [my] purpose, and I'm prepared to deal with that by selling the bad ones. Sort of like what I see on Guitar forums: people take a chance on guitar sold on eBay and go into it "it's just 1,500 quid -- if it's not good, I'll sell it". Instead, a CD doesn't cost 1,500 quid, so I buy them in greater quantities... So I wonder what HMRC would think about that....

Your defence here would be your collection wouldn't it?

You can demonstrate you have a selection of the "best" you bought. If you had nothing you're screwed but you can explain as you have here and say "look here they are" which a trader wouldn't have.

 

[andybird123]

This isn't actualy a new rule is it? 1k has always been the occasional trading limit?

The new bit is that eBay and similar are being asked to handover lists of people who have accounts that have done more than this value in a year so that they can start chasing people who *might* be trading but not declaring anything.

At the end of the day hmrc will have to have some sort of evidence of actual trading before they come after you, so people who are selling bnib items are much more likely to have a problem than people selling 2nd hand stuff, if it's high value but low volume then you should be in the clear.

 

[Raymond Lin]

keep reposting this, I keep forgetting and remembering in bed!

I’ve done mine last night! Funny how simple it is, in my mind it’s this mammoth task but since I keep my income through a separate account it’s quite straight forward. I don’t know why I put it off to the last minute lol

 

[Mercenary Keyboard Warrior]

I’ve done mine last night! Funny how simple it is, in my mind it’s this mammoth task but since I keep my income through a separate account it’s quite straight forward. I don’t know why I put it off to the last minute lol

Hehe yeah its not that hard unless you have uber complicated affairs.
I forgot mine again, need to login to a few portals to get a few statements.
Think I will make a note to do tomorrow whilst at work, few logins for a few minutes to break up the day