Ebay and the Taxman

[dgs]

Hi, I'm a 70 year old man who had to give up work over 2 years ago to care for my wife 24/7 after she had a major health problem which derailed life as we knew it totally. I've always done ebay, selling personal items and recently the last few years have been buying at auction to sell on eBay for profit. Some auction items I've bought for ourselves, some items haven't sold, some items I've made a loss on, and some I done well on?
I recently got a letter from hmrc about my ebay activity and I'm thinking I need to make a disclosure because i'm over the limit for sales per month and monetary sales per year (easy to reach such a low threshold) Ive calculated my profit per year for 2022/23 and 24 average around 2K per year.
I've looked at the Gov.uk website and cannot see what I have to fill in or print off and fill in at all?
Need some help and advice on this as I find it so confusing. Saw something online about a SA100 form or something?
Any help and advice is appreciated
Thankyou

[echat11]

All the HMRC is interested in the items sold to make a profit.

The important thing is you are doing this on each tax year.

Clearly state the items that you have kept, you minus the items you made losses on, from the items you made a profit on.

You need to get everything on a spreadsheet

https://community.hmrc.gov.uk/custom...2-00155d3ba57b

https://www.gov.uk/self-assessment-tax-return-forms

Posted for information only.

https://www.reddit.com/r/UKPersonalF...les/?rdt=55933

[dgs]

Great advice and links thankyou
A couple of questions for you?
What if you don't do spreadsheets is there an alternative?
And when you say deduct the losses from the profit? Surely if I make a loss on something i buy at auction, it doesnt sell for what i wanted for it and i sell it for £20 less than i paid thats my problem surely? Regards dgs

[Pezza54]

You can buy accountancy lined pads at amazon uk for about £9
60 a4 sheets, 8 columns, holed for filing

Columns for:
a. the item
b. date bought
c. price paid
d. date sold
e. £amount sold
f. cost of packing, postage
g. profit [ e - (c + f) ]

If profit is a negative figure that equates to a loss

7 columns leaves 1 column for notes

or

if you use microsoft word you can create columns and lines (but not straight forward) If you can this may be a preferable solution. A user can adjust the width of columns and make it landscape for wider columns

[echat11]

'And when you say deduct the losses from the profit? Surely if I make a loss on something i buy at auction, it doesnt sell for what i wanted for it and i sell it for £20 less than i paid thats my problem surely?'

I would provide a complete summary of your transactions

You buy a hat at Auction for £20, sell if for £50, profit £30.
You buy a tie at Auction for £30, sell it for £70, profit £40,
You buy a belt at Auction for £70, sell if for £30, loss £40,

Your overall profit for the 3 items is £30.

You can see why declaring all transactions profit and loss is beneficial.

I hope that makes sense.

I hope your wife is making progress through the challenges faced.

[dgs]

Hi. Could somebody help with the filling out of Year Ended 2024 as an example?
As an ebayer that sells personal stuff and also buys at a cheap end auction locally, my total profit for that year was about 9K
50% of that was personal stuff of mine and my late parents, and 50% was auction profits.
So the first column would show 4.5K
Tax column, would that be 20%?
Interest column = ?
Penalty column = ?
I'm a 70 year old pensioner that cares 24/7 for my wife after her life changing health problem 2 years ago, so only income is our pension and attendance allowance.
I know they can see my ebay sales but how do they know that mine is a 50/50 split or do they just take my word for it?
Any help and advice appreciated

[PallasAthena]

As an ebayer that sells personal stuff and also buys at a cheap end auction locally, my total profit for that year was about 9K
50% of that was personal stuff of mine and my late parents, and 50% was auction profits.

Why are you declaring the sales of personal possessions of yourself and what you inherited from your parents?

You only declare to HMRC the profits from TRADING. ie when you buy something with the intention of selling it (and hoping to make a profit but may incur a loss). So in your case the only items you are trading in appear to be what you buy at auction.

See this HMRC site [my bold] Check if you need to tell HMRC about your income from online platforms - GOV.UK

Selling personal possessions

Personal possessions are items that belong to you for your own use. You may have bought them or received them as a gift.

Personal possessions might include things like:

• clothing
• ornaments
• kitchen equipment
• table and chairs
• jewellery
• computers and phones

If you're selling personal possessions you probably do not have to pay Income Tax on these.

[echat11]

You need to get this right. You don't want to end up paying what you don't owe.

https://community.hmrc.gov.uk/custom...5-6045bd0ad9d8

https://www.gov.uk/guidance/check-if-you-need-to-tell-hmrc-about-your-income-from-online-platforms

Google a local accountant near to you, ask if they can just look through the form to check it's correct, explain that your struggling with the form, allowances etc.
They will probably help pro bono.

[Pezza54]

You should have 2 ebay accounts, personal and business
Many buyers are put off if they see a business seller using a personal account
Your private sales do not need to feature in your trading account
Don't forget to deduct postage and packaging costs to reduce your profit
If your gross trading income is over £1k pa you should report this income to HMRC by completing a Self Assessment
On your Self Assessment you should deduct the £1k trading allowance and tick the box to ensure HMRC know you are doing so

Your trading income is added by HMRC to any other income you receive and taxed accordingly

Please read HMRC Tax Return SA100 box 18 on page 3 and "Box 18 Total amount of allowable expenses" on page TRG 9 of the Tax return notes

[echat11]

Personal allowance is taken into consideration, so you might owe them nothing.

[dgs]

Thankyou for your replies
But could somebody hypothetically tell me based on 4.5K profit what would normally go into those columns as an example? Thankyou

[Pezza54]

Sorry I do not recognise the Schedule of duties form. It does not seem appropriate to report to HMRC. HMRC calculate any tax due

You can complete your SA100 (self assessment) forms for up to 3 previous years. You may have to pay a penalty

You can obtain these forms at www.webarchive.nationalarchives.gov.uk "How to complete your tax return for Self Assessment"

[echat11]

https://taxvol.org.uk/index.php/about-tax/

https://www.citizensadvice.org.uk/de...ng-tax-advice/

[dgs]

Hi. Just got off the phone to Ebay
My point to them was you could go back only 2 years on the seller hub and see each individual item and what it sold for, when in my case i need to see sales (not just figures) back to Jan 2021.
But they say because of a 'system change' they cannot facilitate that anymore? They can only give total sales in figures for any year before 2023 which is no use to me, as correct me if im wrong, hmrc aren't interested in personal items sold on ebay but only the profits from items bought at local auctions or car boot sales to sell on at a profit.
So i'll have to get onto hmrc on monday and explain the situation with ebay?
Appreciate your help.

[Pezza54]

Before you contact HMRC you should read the guidance "I'm buying or making things to sell" at www.taxhelpforhustles.campaign.gov.uk
If you made less than £1k in a tax year, you do not need to report it to HMRC

The government has announced a new reporting tool for traders is on the way which will make it easier and faster for traders to report their annual accounts to HMRC

Trading platforms must now report to HMRC sellers that sell more than 30 items a year through their service