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

Kenai · 2 Jan 2024 at 15:55

henson0115 said:
i assumed it applied to all sales over 1k. if your paying tax when you buy the car which you are and tax again over the 1k limit then your being taxed twice no?

Assuming you're talking about trading, what tax do you think you're paying when you purchase a vehicle?

VincentHanna · 2 Jan 2024 at 15:56

new boy said:
You can earn what you like through PAYE. Nothing to do with this.

You can then make up to £1000 turnover self employed before you have to register and pay tax on your earnings. eBay trading and such counts towards that.

If you mow some lawns and take £600 then buy and sell on eBay and take £600 you will need to register

My wife gets Dividends and is self employed.

Does she still get a £1000 trading allowance or is that already swallowed up by the dividends allowance?

Zefan · 2 Jan 2024 at 15:57

Sounds like - unfortunately for you - you are, in fact, a shop.

413x · 2 Jan 2024 at 16:00

Zefan said:
Sounds like - unfortunately for you - you are, in fact, a shop.

Yeah looks like it. It'll take a couple Of years to sell what I have keeping under 1000. Then it's all gone.

NickK · 2 Jan 2024 at 16:06

Destination said:
This is utter ***** m8.
People have been meant to declare their turnover when it was above £1000, and they clearly haven't been, so HMRC is tightening up upon such things.
It isn't how they 'get the ball rolling' if they're selling over 1000, the ball is well and truly rolling already.
Also if it is the only thing they are doing, then they'll still have a massive tax free allowance, which would allow sales of up to 13000, and indeed profits of up to 12500, but you still have to declare you are doing it.
So I disagree entirely with what you are saying.

They are selling and the total sale is 1K/year. IIRC that’s 40% tax..

My point here is £400 tax causes the business to fold vs. far higher tax if they flourish.

Perhaps we should ask HMRC if the PPE billions income by directors was taxed and how much?

Jono8 · 2 Jan 2024 at 16:15

Minusorange said:
How naiive, they'll go after the low hanging fruit, the people who are slightly over who don't know any better

People only slightly over, and who only might have to pay 20% on the profits?

That is a lot of pointless work by the HMRC to get ~ £20 off a few thousand people.

Kenai · 2 Jan 2024 at 16:19

They'll be going for the mid hanging fruit, it's too much admin to chase down the minnows, they'll go after the people making a decent penny, clearly running a trading business earning them a good few thousand per year but declaring nothing.

Raymond Lin · 2 Jan 2024 at 16:19

This reminds me, I have 29 days to do my self assessment ! lol

413x · 2 Jan 2024 at 16:20

Wonder how many people

A: will carry on doing what they have been, breaking rules and not fill in SA
B: realise they are breaking the rules and following them isn't worth it and just stop.
C: realise they are breaking the rules and do an SA

I fall into B.

I assume (hope) that if I stop now it'll be OK. (fingers crossed)

builder22 · 2 Jan 2024 at 16:20

fairly sure you can just use cash basis accounting...it's basically just money in and money out within the tax year, you need to keep records of sales/purchases (easy if it's all done online) but you don't have to itemise/list everything for self assesment

Kenai · 2 Jan 2024 at 16:23

413x said:
Wonder how many people

A: will carry on doing what they have been, breaking rules and not fill in SA
B: realise they are breaking the rules and following them isn't worth it and just stop.
C: realise they are breaking the rules and do an SA

I fall into B.

I assume (hope) that if I stop now it'll be OK. (fingers crossed)

I think the majority of group A will rapidly become B or C once a letter lands from HMRC saying "eBay told us you made £2000 worth of sales this year, you probably owe us some tax"

413x · 2 Jan 2024 at 16:25

Kenai said:
I think the majority of group A will rapidly become B or C once a letter lands from HMRC saying "eBay told us you made £2000 worth of sales this year, you probably owe us some tax"

I think so too.

For most people it isn't worth it.
Unfortunately it probably means a lot of Stuff going to landfill.
For example people who don't make any profit but buy/sell a lot.

It doesn't take long to go over 1000 with high value stuff.

Zefan · 2 Jan 2024 at 16:27

413x said:
Yeah looks like it. It'll take a couple Of years to sell what I have keeping under 1000. Then it's all gone.

If you're really not doing it as a business, and just sell the stuff you enjoy working on/collecting/whatever and it happens to make a profit then I (am I am by no means a tax expert or advisor of any kind...) be tempted to stick it on fbm instead. I presume fbm isn't Big Brothered too? I have quite a few old bits and pieces I just couldn't help but pick up at charity shops/boot fairs (I'm so posh me) and the thought of having to self assess and then potentially pay tax just to move it on is a grim thought.

Is this technically forcing every person in to a sole trader position for tax purposes, but with a £1k threshold?

henson0115 · 2 Jan 2024 at 16:27

Kenai said:
Assuming you're talking about trading, what tax do you think you're paying when you purchase a vehicle?

my point is that if its over 1k whats stopping them saying all private sales actually fall into that category. maybe im overthinking it.

NickK · 2 Jan 2024 at 16:28

Raymond Lin said:
This reminds me, I have 29 days to do my self assessment ! lol

Self assessment sucked. Last company I got an accountant as an umbrella company. Only the close of the business occurs 2 weeks after starting new role (and they had been advised).. hence HMRC’s computers decided ai’d under paid tax to the tune of 32K was in order.. only to be corrected the next month.

I agree we should pay tax.. but HMRC are blindly following the gov. The gov that has destroyed the economy and fails to support making people feel they can make some money and prompt growth.. but at the same the PPE probably ended up with little tax..

Kenai · 2 Jan 2024 at 16:30

henson0115 said:
my point is that if its over 1k whats stopping them saying all private sales actually fall into that category. maybe im overthinking it.

Private vehicle sales aren't relevant to this, this tax is about trading.

Minusorange · 2 Jan 2024 at 16:30

Jono8 said:
People only slightly over, and who only might have to pay 20% on the profits?

That is a lot of pointless work by the HMRC to get ~ £20 off a few thousand people.

It's HMRC, if you're even a pennie over, they're coming for you

new boy · 2 Jan 2024 at 16:30

VincentHanna said:
My wife gets Dividends and is self employed.

Does she still get a £1000 trading allowance or is that already swallowed up by the dividends allowance?

I don't really know what I'm talking about so probably best asking someone who does lol. I only looked into it enough for what was relevent to me when I had a project going a couple of years ago.

NickK · 2 Jan 2024 at 16:30

Zefan said:
If you're really not doing it as a business, and just sell the stuff you enjoy working on/collecting/whatever and it happens to make a profit then I (am I am by no means a tax expert or advisor of any kind...) be tempted to stick it on fbm instead. I presume fbm isn't Big Brothered too? I have quite a few old bits and pieces I just couldn't help but pick up at charity shops/boot fairs (I'm so posh me) and the thought of having to self assess and then potentially pay tax just to move it on is a grim thought.

It’s self certified, so the onus is on you to correctly report irrespective of ebay/fbm/back of the pub.

Jokester · 2 Jan 2024 at 16:31

I suspect they'll get a letter/email from Ebay or whoever indicating that they have disclosed their financial information to HMRC under a Paragraph 1, Schedule 23 to the Finance Act 2011 request and that they should speak to an accountant/tax adviser to see if they have a tax liability.