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Heads up for the people who make and sell items and casual sellers.

Bighit

Bighit

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If you’ve ever sold on eBay, Etsy, Vinted, or even Facebook Marketplace, this is for you. HMRC actually receives sales data directly from PayPal, Etsy, eBay, etc., meaning that even casual sellers are being flagged by their AI-powered system. So, in this video, I reveal how one client of mine - an online seller - was nearly fined £3,000 by HMRC for simply clearing out a few unwanted bits and bobs. I’ll walk you through a real case study, show you exactly what triggers an HMRC investigation, and explain how to avoid fines, penalties, or worse. Whether you’re making oddly-scented candles for Etsy or flipping stinky vintage trainers on Vinted, this could save you a whole heap of trouble.


Lots of people use PayPal for their sales of parts they make and sell or for items they sell casually.


 
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Saw this on YT a few days ago, thanx for the headsup for others.
Its a joke TBH, so you can't even sell a few items online without the Govt wanting to tax you again.
And I think the threshold is quite low, eg: £1k, so you really don't need to sell much to get flagged.
Sell a couple of S/H bits and you can easily go over.
Whats next? taxmen looking at boot sales FFS.
You pay tax on your earnings, then you pay tax on whatever it is that you buy, then they want you to pay yet more tax on selling your S/H stuff.
IMHO if two peeps wanna buy/sell some of their own old personal possessions, that should have nothing to do with the Govt at all!
Totally get it for legit business's, but for your average Joe just getting rid of some old stuff or stuff they no longer need, not on in my book, not on at all.
 
I think this came in around 2021/2022? not 100% sure, so if you sold before this you may be ok, not sure how far back the tax peeps can go.
Luckily for me, although I've used Fleabay for years, I've never sold a lot on there and have not sold anything for few years due to their excessive fees etc. Only every use it to buy stuff now, and only if I can't find it anywhere else TBH.
Another nail in the coffin for online selling platforms maybe?
 
My wife has friends who go to charity shops and car boots and then resell and two of them have been investigated. One has given up due to it.

They were running a business though.

Plus PayPal is owing accounts if they suspect you are using Friends and Family for your " business" hence some only taking cash .
 
Be diligent and keep invoices to show the robbing barstewards you're not running a business.
If you buy something now with VAT already added that you end up selling when in need of cash why should you have to pay again?
If that personal allowance threshold is crossed and you can prove you are not a business it shouldn't really be an issue.
I'm an atrocious saver. Years back I decided to address this by buying stuff I knew was easy to sell on to free up cash. It satisfied my shopping urges and stopped me buying complete sh**.
I only sell when I absolutely have to.
This shouldn't be a crime or a target for the taxman.
 
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Bighit said:
My wife has friends who go to charity shops and car boots and then resell and two of them have been investigated. One has given up due to it.

They were running a business though.

Plus PayPal is owing accounts if they suspect you are using Friends and Family for your " business" hence some only taking cash .
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One of my neighbours was moaning to me the other day about this as he buys and sells stuff to supplement his wages. He was talking about renting his house out and living off grid!
I fear things will get worse as our taxes look like 5hey will definitely increase later this year😩
 
This is why you need accounts and records. Taxes are only levied on gains and value increase. If you make a loss then that can be offset against gains. £3000 /year in pure buy/sell gains is tax free (CGT allowance). But this will go down shortly, I'm sure as CGT allowance has been steadily reduced over the last few years. Look at the rules for small businesses too. VAT is a great tax for the government as it is so hard to avoid/evade.
 
Could rebound on the tax man.
If they tax you on items with a mark up, you are also able to claim a loss on items sold at a price less than when purchased.
Shouldn't take much imagination to sell a couple of old mattresses or 7 year old electric appliances and TV.
As the items have been "stored" in your home, a percentage of energy bills and council tax will also be an allowable deduction, together with some motoring costs.
To avoid above scenario, I expect the tax man to tread carefully and although many may get a letter, which should not be ignored, if your sales amount to no more than items of personal property there will be zero tax to pay.
It has always been the case, if you sell a car once a year the tax man doesn't want to know.
If you sell once a week, you will be classed as a dealer.
At any car boot sale it is easy to detect those selling their own SH. wares and the traders with stalls full of new items.
 
pjgtech said:
Saw this on YT a few days ago, thanx for the headsup for others.
Its a joke TBH, so you can't even sell a few items online without the Govt wanting to tax you again.
And I think the threshold is quite low, eg: £1k, so you really don't need to sell much to get flagged.
Sell a couple of S/H bits and you can easily go over.
Whats next? taxmen looking at boot sales FFS.
You pay tax on your earnings, then you pay tax on whatever it is that you buy, then they want you to pay yet more tax on selling your S/H stuff.
IMHO if two peeps wanna buy/sell some of their own old personal possessions, that should have nothing to do with the Govt at all!
Totally get it for legit business's, but for your average Joe just getting rid of some old stuff or stuff they no longer need, not on in my book, not on at all.
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It's a stupid system but unfortunately the reason is that most legitimate business's sell on eBay and other selling sites so they don't pay tax on items most charities most people do t understand charity shops only have to pay 10% of the profits to charity the rest goes to the owner unfortunately people's greed spoil it for the hard working and honest out there
 
A few years back I sold a personal possession on ebay when I upgraded and happened to make a decent profit so I started to look for similar items (nothing to do with airguns) that I could renovate, repair or break for spares and sell on. I would describe it as a hobby that paid for itself but no doubt about it, it intentionally made a profit. Nothing huge but not always mere pin money. About 2 or 3 years ago I got a letter from HMRC that said that it looked as if I was an on line trader and I needed to submit a tax return. Now, I had bought stuff over the years that ended up being scrapped or sold on at a loss as well as bits I had done well on. I had no records other than bank statements, credit card statements, paypal and ebay records and I had no idea what HMRC knew or how far they would look back. The honest truth is that I had no idea how much I had made, and no way of writing off losses against profits. I couldn't trace many legitimate expenses as I often paid cash and kept no records.

All a bit naive on my part.

It caused no end of sleepless nights worrying about it. I ended up collating everything I could trace, going back as far as I could, and paying a tax accountant to do the return for me and setting things straight with the revenue. I ended up owing the accountant four times more than the taxman. :(

The stress it caused me more than cancelled out any profit I had made, and the truth is, I don't need the money and I really only did it because I enjoyed it.

The parties involved are now quite open about this, ebay will tell you how much you can sell before they are obliged to tell the tax man and the tax man will tell you how much you can make before there is any obligation to file a tax return. Stay bellow these limits and all will be fine. There is not neccassarily any tax due just because you sell over these limits. Selling your outgrown baby clothes, the bicycle you no longer use, your old vynyl records and collection of limited edition Daystates won't neccassarily attract a tax liability but if you look like you are dealing, you may be told to file a return.

Being an enthusiast that changes his airguns every week may make you look like a dealer and you may have to show that it's simpy a hobby.

If you are buying to sell and make a profit over the allowance, then it's a business and it's only right you pay what's due.
 
I reached a 30 items sold on eBay (allowance is about £1700 or 30 items per annum) so I got a message through eBay yesterday to update my details with my NI number 👎 I will see if I can register again with a new name and address and start again 🤫
 
colinb said:
This is why you need accounts and records. Taxes are only levied on gains and value increase. If you make a loss then that can be offset against gains. £3000 /year in pure buy/sell gains is tax free (CGT allowance). But this will go down shortly, I'm sure as CGT allowance has been steadily reduced over the last few years. Look at the rules for small businesses too. VAT is a great tax for the government as it is so hard to avoid/evade.
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So, if you sell (for example) jeans belonging to a fat bloke, as they now too big for me, that's a loss? So for the sake of argument I need only show the proof of purchase and the sale being less than that if challenged?
 
It appears that the self-reporting from sales sites is only the big, organised ones where each transaction is discrete and can be tracked - so ebay, etsy, vinted.. FB marketplace, Gumtree, Freeads etc remain unhindered as there's no infrastructure in place to log sales, I suspect the sites have very little appetite to spend the time and money making this so, listings can be deleted without record and it's probably a hiding to nothing for HMRC to try to extract this data from them.

Personally I stopped using ebay a long time ago due to their ongoing efforts to apparently make the platform entirely unfit for purpose as a seller. I found Vinted to be extremely poorly run and Etsy doesn't really seem appropriate for shifting the occasional random crap I find myself needing to punt on.

I did help a friend list an item on their personal ebay account recently - one of the demands was something like "enter your name and national insurance number as they appear on your government-issued ID" - all to flog a few privately-owned household items upon which VAT had already been paid at purchase, from money that had been taxed when earned. F*ck off.

It would be interesting to see exactly what Paypal passes on to HMRC, and whether this is limited to transactional payments (goods and services) or whether it includes gift payments as well.

This smacks of typical, mis-directed authoritarian over-reach - while it's entirely legitimate to tax businesses being run on on the sly and depriving HMRC of significant sums in tax, as usual it seems to be having a collateral effect on those it really shouldn't affect.

On top of all that it's the usual story of shitting on the small man while the huge, socially / environmentally / economically damaging globalised corporations (Amazon being the obvious one) shirk tax obligations and continue to funnel wealth into the pockets of a tiny minority.
 
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