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

Kenai said:
They'll send a letter but they won't be hunting down and demanding evidence from someone who sold £1100 worth of stuff and claims it was just personal possessions unless it's blindingly obvious they're lying, it just wouldn't be worth the effort.
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I don't know. It's very little effort on their part to send you a letter asking to provide evidence. The onus to prove is on you. Can't prove it? Sorry, it's not the justice system where innocent until proven guilty. It's guilty unless you manage to prove innocent, isn't it?

My girlfriend did self-assessment because worked at two jobs, was hoping that she overpayed tax, so hoping to get some back. Declared a few work expenses to be reimbursed (like a uniform or something). Instead of getting a reimbursement, she received a letter saying that she claimed too many work expenses and now she owes money to the Queen, even though she literally did anything about said work expenses after the tax year ended, so she didn't apply for anything prior and didn't get any discounts or anything. So they somehow weirdly managed to turn it around and make it so that she owes 160 quid. Which is, ok - survivable, just pay and get on with your life, and lesson learned: don't submit self-assessment if you don't have to.

But the point is: you think they'd have gotten off her back? The letter clearly said she had something like 60 days to dispute and had to pay by the end of year. Should she have thrown the letter away and forgotten about it?
 
hellarda said:
You clearly have no idea how HMRC operates - unless you are unlucky and get randomly spot checked by someone who got out the wrong side of bed that morning - HMRC do not have the resources, and cannot justify the cost and time, to go after the small fish who should be paying a few tens or hundreds more in tax.
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But they spent 38 million on an IT system. That should have hopefully added some automation.
 
andybird123 said:
They don't, which is why you have to self report, but when you report you tell them it wasn't trade and no profit means no tax. Even if you are trading, profit under £1000 also means no tax. You don't even have to keep records for costs, you can just assume a cost of £1000 so that you only declare what is over £1000 as profit.
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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? I bought hundreds of CDs during the lockdowns (an old passion of mine that I had forgotten about, ie dropped a decade ago, but nostalgia came back). When I'm in, I'm fully in. I don't just buy one copy - if I love the album, I'll buy every version out there, and then a back up copy (for if I damage the daily-driver one -- cause when it's gone, it's gone, it'll all be "streaming" or vinyl). Then I raised my standard of acceptable condition and decided that I need to re-purchased all scratched ones. So I added up all numbers one day and realized: no, I'm insane, most of it must go. So now in this situation, how do I prove that I didn't buy them to resell? I bought most of them in the last 3 years. And to add insult to injury, my PayPal account will show that I bought some of the titles very recently -- bought to replace the scratched copies that I'm selling. But will HMRC care to go into such detail? They'll look at the transactions and say "you purchased them very recently. Reseller. Tax avoider! Next!"

All that's to say: my activity belongs to the capital gains tax category. Any CDs I sell over the purchase price go towards the 6,000 pound allowance. Trust me, I ain't getting 6Gs in gross amount if I sell them all, let alone in profit. So I'm safe there, and the regulation says I don't gotta declare jack.
But now, with this new mandate for marketplaces, HMRC will get my eBay sales data and will get intrigued. Now, I'll have to fill out the self-assessment at the very least (that's unncessary paperwork I shouldn't do; it took too of my time to take photos, write descriptions and list the hundred or so CDs I sold this year, I don't want to add a "quick and easy" HMRC form to the list), and possibly trying to prove my intent when buying the CDs - that it wasn't intented for resale, but was rather bad judgement.
 
new boy said:
To be fair, HMRC are pretty cool. I would recommend anyone talks to them if you need help trying to figure out what you actually need to pay. Probably best not to talk to them if you are some people in this thread though lol.
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I talked to them today. Not very cool. One advisor honestly said that info on this is not available to HMRC personnel yet -- they don't know how to answer questions about this. And that person said they'll report that the management. I was asking simple questions like:
- are marketplaces expected to report for the full tax 2022-2023 tax year? The wording says "from Jan 1, 2024, collect and report", which implies that they don't expect marketplaces to have any info prior to Jan 1, 2024, so they don't expect data for the full tax year 2022-2023 - right?
- do they expect market places to report numbers for tax years or calendar years? Because eBay rep told me they'll be reporting for calendar year periods.

HMRC couldn't answer this. One chap admitted they don't have guidance on this. Another lady kept quiting the same text from the web page -- the same text that I was wasking her to clarify. Then asked me to talk to eBay. Dude, if your organization came out with rules and you can't offer an explanation of a statement from your organization, why are we even talking about a third party?

To add insult to injury, eBay rep told me they're still waiting for more info from the government, not everything is clear.

I'd have hoped they'd have figured out the rules before they roll it out.
 
I've sold 3 or 4 high value items and the total must £4-5k, but I'm not trading.

The items were old and I have no receipts.
 
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I'm sure I'm going to rile a few people with this notion, but the cynical part of me can't help but think that this is some scheme to prop up a shortfall at the treasury.

It could be correlation rather than causation I admit, but it really feels like they're getting desperate for some reason.

Can't help but think there are more effective ways to generate tax revenue, like ensuring big businesses and corporations pay their fair share. Hey ho.
 
randal said:
I'm sure I'm going to rile a few people with this notion, but the cynical part of me can't help but think that this is some scheme to prop up a shortfall at the treasury.

It could be correlation rather than causation I admit, but it really feels like they're getting desperate for some reason.

Can't help but think there are more effective ways to generate tax revenue, like ensuring big businesses and corporations pay their fair share. Hey ho.
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Agree. I think it's a matter of going after the easy target. Arguably some of the target people should indeed be paying tax. But it feels like they went after the easy target (online recorded transactions) rather than trying to crack down on the bigger issues of a lot of businesses taking cash (and sometimes money laundering) such as car washes, barbers, etc. But the end result may be fewer people doing the small on the side hustles to supplement their income, which will have a net negative effect.
 
neocon said:
How about FB marketplace is that affected?

I suppose not since it's garbage.
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Its going to get a lot more popular.
Then the crack down will happen in there.

I've delisted my remaining items on ebay as its new year. Usually they are up for weeks until they sell. I'll re add some in next tax year and be careful to stay under 1000
 
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I have one expensive (not 1k but getting there) old thing left to sell that's appreciated.
The tax on if its CGT or just income is vague. I'd rather just sell. It on FB than have to deal With all the faff. May get a bit less. But if I can avoid the faff.. I'll do that.
 
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neocon said:
I've sold 3 or 4 high value items and the total must £4-5k, but I'm not trading.

The items were old and I have no receipts.
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Same.

I sold an old Voodoo 5500 PCI for £500, a load of rare car bits for 2k and some rare GameCube games for around £500 total. I tend to keep all my junk in the attic until it becomes valuable because it is things that normally get thrown out.
 
413x said:
I have one expensive (not 1k but getting there) old thing left to sell that's appreciated.
The tax on if its CGT or just income is vague. I'd rather just sell. It on FB than have to deal With all the faff. May get a bit less. But if I can avoid the faff.. I'll do that.
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If the 'old thing' is a personal possession, it's CGT you'd need to check, not trading allowance. Even then, a lot of things are exempt from CGT too.
 
tttt said:
I don't know. It's very little effort on their part to send you a letter asking to provide evidence. The onus to prove is on you. Can't prove it? Sorry, it's not the justice system where innocent until proven guilty. It's guilty unless you manage to prove innocent, isn't it?

My girlfriend did self-assessment because worked at two jobs, was hoping that she overpayed tax, so hoping to get some back. Declared a few work expenses to be reimbursed (like a uniform or something). Instead of getting a reimbursement, she received a letter saying that she claimed too many work expenses and now she owes money to the Queen, even though she literally did anything about said work expenses after the tax year ended, so she didn't apply for anything prior and didn't get any discounts or anything. So they somehow weirdly managed to turn it around and make it so that she owes 160 quid. Which is, ok - survivable, just pay and get on with your life, and lesson learned: don't submit self-assessment if you don't have to.

But the point is: you think they'd have gotten off her back? The letter clearly said she had something like 60 days to dispute and had to pay by the end of year. Should she have thrown the letter away and forgotten about it?
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Did she correctly claim though?


The uniform cleaning discount only applies to certain perofessions
 
Its old advice but the definitions are the key (and actually the £6k hasn't changed)

Selling Second Hand Items on the Internet

Due to the current economic climate, I have been looking for ways to supplement my income and have sold a number of old second hand items on internet auction sites and classified adverts. I’ve read an article which suggests I may have to pay tax on the money I receive in this way. Is this correct?
www.taxassist.co.uk www.taxassist.co.uk
 
adam cool dude said:
Same.

I sold an old Voodoo 5500 PCI for £500, a load of rare car bits for 2k and some rare GameCube games for around £500 total. I tend to keep all my junk in the attic until it becomes valuable because it is things that normally get thrown out.
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I have a loft with a load of high value computer games and a collection of yugioh cards that I think I’m better to liquidate than to gift it to a relative as it would cause them work and they may undervalue it…. This won’t be for some time yet but this change in the process makes it much more difficult.
 
Where does something go from CGT to trading?

I bet there's a grey area for it.

Probably if it's all relatively low HMRC will take your word for it.
 
413x said:
From what I gather you'll be OK this year as it's from 1st Jan 2024.

But if it was in one tax year from now you'd have to fill in self assessment.

(technically)
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Technically, no.

I spoke to HRMC about this about a year ago. They said Self-assessment only applies when you're actually doing "trading", ie buying to sell. However, they failed to mention that it does apply when Capital Gains tax is applicable (more on that later). If not, self-assessment doesn't have to be filled out and it doesn't have to be reported in any way shape or form as long as the profit (from selling a personal possession that you didn't buy to resell) you've made is under 6,000.

I just did that "do I need to do self-assessment" check to confirm - the result is "no". At no point was there a question "have you sold any personal belongings with a value of over 1000". There was a question about whether you have to pay Captal Gains Tax on "most personal possessions worth £6,000 or more (apart from your car)" -- note, over 6Gs.

So technically, if you're selling private things that you didn't buy with the intent of selling for profit, then it's Capital Gains territory. and then the threshold for reporting is 6 grand. And even then, looking at CG section on HMRC website, it looks like they're interested in high end stuff, such as jewellery, art, real estate, financial instruments, and it may not be applicable to computer parts and vinyl records: "anything with a limited lifespan [is excempt]": https://www.gov.uk/capital-gains-tax-personal-possessions

Now I made a mistake in regards to the 6,000 figure initially. I was pretty sure I heard it "if you make a profit of 6G", but it's "You may have to pay Capital Gains Tax if you make a profit (‘gain’) when you sell [...] a personal possession for £6,000 or more" actually seems to mean: if you've sold something for 6 gran, and made profit - declare.
 
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