eBay Private/Business selling, HMRC & Fees?

[Coinery 1,164]

With the current position that private sellers pay no fees, whilst business sellers continue with the standard 10% (approx), what’s the incentive to ‘go straight’ as a business? Unless…

There’s this new upcoming position where eBay are soon to be reporting the figures of ‘qualifying’ private sellers to HMRC for tax purposes. I wonder therefore whether eBay will be coming back at the private sellers for their lost commission on past sales, if they can evidence, along with HMRC, that trading has taken place?

Any thoughts?

[Paddy 1,775]

I understood that Ebay is already reporting trading figures, private and business, to HMRC. So if one tried to hide as a private seller whilst doing too much business, they would soon be onto you.

Of course the unscrupulous just have multiple private accounts to hide their totals.

[DaveG38 408]

So, what level of sales qualifies as 'private' and 'business,' in the minds of HMRC? Does anybody know? After all, it is quite easy to sell multiples of items, simply by clearing out cupboards etc.

[Coinery 1,164]

46 minutes ago, Paddy said:

I understood that Ebay is already reporting trading figures, private and business, to HMRC. So if one tried to hide as a private seller whilst doing too much business, they would soon be onto you.

Of course the unscrupulous just have multiple private accounts to hide their totals.

I don’t think it’s started, yet, because eBay also have to inform the seller that the figures are being released to HMRC, as I understand it.

Also, multiple accounts won’t work, unless you register at different addresses, phone numbers, emails, IP addresses, etc. etc…they can already link accounts and family accounts for shilling practices.

PS I don’t mean hiding as a private seller from HMRC, I mean will eBay be successful in pursuing those who are revealed as ‘traders’ by HMRC for avoiding their fees by masquerading under a private seller account?

[Coinery 1,164]

46 minutes ago, DaveG38 said:

So, what level of sales qualifies as 'private' and 'business,' in the minds of HMRC? Does anybody know? After all, it is quite easy to sell multiples of items, simply by clearing out cupboards etc.

Not sure, Dave, I don’t think it’s very much?

[DaveG38 408]

19 minutes ago, Coinery said:

Not sure, Dave, I don’t think it’s very much?

Not only is it what is sold, but surely, whether it makes any profit or Capital Gains? Last year, I sold around £4.5k of coins on ebay, but these were all as a result of upgrades to my collection, so no business transactions. Overall, I pretty much sold them for around what I paid, so from a 'business' point of view, there was no income or gain, as such, so how can HMRC determine what constitutes a business. On a completely different area, I have just about finished clearing out a whole load of my wife's unwanted clothing - about 8 charity bags in total. Looking at ebay, I could, if I was motivated, have put them on there, and made a thousand or so, overall. That is peanuts compared to what she paid, so no profit there, but again, how can HMRC determine what has been sold, and whether it is likely to have generated a profit?

Based on the above, it strikes me that HMRC will spend more time and money investigating and checking than will be gained in income to the Treasury.

[Coinery 1,164]

38 minutes ago, DaveG38 said:

Not only is it what is sold, but surely, whether it makes any profit or Capital Gains? Last year, I sold around £4.5k of coins on ebay, but these were all as a result of upgrades to my collection, so no business transactions. Overall, I pretty much sold them for around what I paid, so from a 'business' point of view, there was no income or gain, as such, so how can HMRC determine what constitutes a business. On a completely different area, I have just about finished clearing out a whole load of my wife's unwanted clothing - about 8 charity bags in total. Looking at ebay, I could, if I was motivated, have put them on there, and made a thousand or so, overall. That is peanuts compared to what she paid, so no profit there, but again, how can HMRC determine what has been sold, and whether it is likely to have generated a profit?

Based on the above, it strikes me that HMRC will spend more time and money investigating and checking than will be gained in income to the Treasury.

I know what you’re saying, Dave, but wouldn’t the sale of 4.5k’s worth of coins to build your own private collection/asset translate as business/stock?

TBH it’s this very point, in combination with HMRC’s clampdown on online sellers, that’s made me rethink re-registering as a sole trader, just to keep everything above board. As a hobbyist the profits won’t be massive, especially after writing off all the expenses, but it could save a whole lot of hassle in the future?

Of course, to sell, or not to sell, on a private or business eBay account is another dilemma…will they be pursuing private sellers for ‘unpaid’ business seller fees in the future? This is my main quandary right now!

Edited January 5 by Coinery

[DaveG38 408]

20 hours ago, Coinery said:

I know what you’re saying, Dave, but wouldn’t the sale of 4.5k’s worth of coins to build your own private collection/asset translate as business/stock?

TBH it’s this very point, in combination with HMRC’s clampdown on online sellers, that’s made me rethink re-registering as a sole trader, just to keep everything above board. As a hobbyist the profits won’t be massive, especially after writing off all the expenses, but it could save a whole lot of hassle in the future?

Of course, to sell, or not to sell, on a private or business eBay account is another dilemma…will they be pursuing private sellers for ‘unpaid’ business seller fees in the future? This is my main quandary right now!

Reference your first line, you surely aren't suggesting that when somebody comes to sell their collection, this somehow makes them a dealer, rather than the collector they were?

[The Bee 148]

There is quite a bit of general guidance, but the focus seems to be 2nd hand clothes (Vinted), 2nd hand Furniture, clearing individual items from your attic etc. 

Selling online & HMRC | UK Seller Centre

Probably best to give HMRC a call , they are usually pretty helpful, though it might be a 30 minutes wait to speak to someone !

Very Best Regards

[May start recycling some of my numerous "duplicates" especially decimal which I pick up with pre decimal and don't collect]

[Coinery 1,164]

1 hour ago, DaveG38 said:

Reference your first line, you surely aren't suggesting that when somebody comes to sell their collection, this somehow makes them a dealer, rather than the collector they were?

No, not at all, but what you said was different…you said you were buying and selling to upgrade your collection (this is the fun bit and what it’s all about, of course, and I’m 100% with you on this) which, in the strictest sense of the word, is trading and making profit.
If you imagine 2 different people being given an antique vase each, and one individual sells his for profit and buys a more valuable one and then repeats and buys two…at the end of the year he has 100 vases and sticks with that, now taking any profit as a wage. The other person, however, just keeps buying and investing in more stock, never releasing the profits as a wage when he gets to 100 vases, but continues instead to build his inventory, now having 1,000 vases. Both have been traders and making the same profit, only one has not drawn a salary…you and I, and many other coin collectors, fall into this second ‘trading’ category.

Of course, some of us just use our already taxed income to buy/hoard more and more coins, this is clearly different. But HMRC would still want a slice of the pie as capital gains, if there were any due, unless they were dispersed with knowledge of the tax laws. It’s a minefield and I don’t profess to know a thing about it…the reason I raise these questions here.

Edited January 6 by Coinery

[Coinery 1,164]

55 minutes ago, The Bee said:

There is quite a bit of general guidance, but the focus seems to be 2nd hand clothes (Vinted), 2nd hand Furniture, clearing individual items from your attic etc. 

Selling online & HMRC | UK Seller Centre

Probably best to give HMRC a call , they are usually pretty helpful, though it might be a 30 minutes wait to speak to someone !

Very Best Regards

[May start recycling some of my numerous "duplicates" especially decimal which I pick up with pre decimal and don't collect]

HMRC are really helpful, but I would definitely do it big of digging around myself, first, or be extremely clear about what information was being divulged…gate after horse and all that for some of the more serious hobbyists?

[mint_mark 9]

All this is just my understanding... I'm not a tax expert or a financial advisor.

Ebay have a reporting threshold if £1740 per year https://www.ebay.co.uk/help/account/regulatory/sales-reporting/uk-digital-sales-reporting?id=5454, which I guess might trigger HMRC to check whether that is from trading or not.

I think HMRC use this "badges of trade" system to assess whether someone is trading https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20205

If you are trading, then I suppose you'd be taxed like a small business (I don't know much about that).

If you're not trading then there is still capital gains tax (from disposing of possessions), but I think almost all coins would be exempt

•     De-monetised coins count as chattels, so they are only chargeable if they sell for more than £6000 (per coin, or set). I'm OK... 😀
•     Foreign currency (that is legal tender in that country) is chargeable... so foreign bullion could get you over the annual allowance.
•     Modern sterling is exempt anyway.

(explained in https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg78305)

That's it for tax.

Eb*y are introducing buyers fees from next month... so that will affect the viability of using it.
From what I've read on other forums, I'm more worried about avoiding all the scams that people try 😟 I haven't sold on there for years, and everything is putting me right off.

 

[Coinery 1,164]

23 minutes ago, mint_mark said:

All this is just my understanding... I'm not a tax expert or a financial advisor.

Ebay have a reporting threshold if £1740 per year https://www.ebay.co.uk/help/account/regulatory/sales-reporting/uk-digital-sales-reporting?id=5454, which I guess might trigger HMRC to check whether that is from trading or not.

I think HMRC use this "badges of trade" system to assess whether someone is trading https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20205

If you are trading, then I suppose you'd be taxed like a small business (I don't know much about that).

If you're not trading then there is still capital gains tax (from disposing of possessions), but I think almost all coins would be exempt

•     De-monetised coins count as chattels, so they are only chargeable if they sell for more than £6000 (per coin, or set). I'm OK... 😀
•     Foreign currency (that is legal tender in that country) is chargeable... so foreign bullion could get you over the annual allowance.
•     Modern sterling is exempt anyway.

(explained in https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg78305)

That's it for tax.

Eb*y are introducing buyers fees from next month... so that will affect the viability of using it.
From what I've read on other forums, I'm more worried about avoiding all the scams that people try 😟 I haven't sold on there for years, and everything is putting me right off.

 

Thanks for looking into this for us, MM, much appreciated 👍

[Coinery 1,164]

Here’s a brief explanation of the new Buyer Fees & upcoming obligatory use of their postage system on eBay, taken from the first article I stumbled across on Google.

 

“From next month a fee will be included in the item price when buying from a private seller.

Buyers will pay up to 4% of the item price, plus an extra 75p.

For example, if they see an item listed for £20 the fee of £1.49 will already be part of the price.

The fee will be lower on higher-priced items of more than £300 and there will be a cap on the total amount they will pay.

This means that buyers who are purchasing lower-value items may end up paying a higher percentage of the item’s total cost in fees than those who make bigger purchases.

Ebay customers will need to start buying their postage through the website at some point this year under new plans from the platform.

Private sellers will have to use eBay’s “simple delivery managed shipping” system by the end of the first quarter this year.

This means sellers must confirm a parcel size and eBay will arrange the shipping at what it calls "competitive rates".

But it is understood eBay is expanding this across all listings on an "opt out" basis over the next few months.

It will then make it compulsory in early 2025.“ (doesn’t say whether this includes business sellers, anyone know?)

 

This in some way answers an earlier question about whether to sell under a business account or a private seller account! The compulsory use of their in-house postage scheme is going to be a killer for all accounts affected…we already know how the global shipping program finished off a lot of the purchases from overseas, on account of the outrageous charges to the buyer.

Another nail I’m afraid!

Edited January 7 by Coinery

[Rob 3,152]

Where is all this written on the actual site rather than a third party discussion board? Ebay don't provide a search bar in Help to improve obfuscation. Nowhere can I see new rules, just the existing ones.

[Coinery 1,164]

3 minutes ago, Rob said:

Where is all this written on the actual site rather than a third party discussion board? Ebay don't provide a search bar in Help to improve obfuscation. Nowhere can I see new rules, just the existing ones.

It’s the new way, Rob, bury it down a road no one can find…I often have to google how to sign out of things, nowadays, they really don’t like you signing out!

[Zo Arms 293]

7 hours ago, Coinery said:

It’s the new way, Rob, bury it down a road no one can find…I often have to google how to sign out of things, nowadays, they really don’t like you signing out!

I delete all the cookies on my phone, regularly. Seems to sign me out of everything. Even here. Have to sign back in, to catch up.