HMRC e-marketplaces campaign -Ebay UK Sales Tax

Whilst we were preparing  for the move to the northern territories we had to clear out the loft of our small terrace house (“cottage” in estate agent) in London.  The loft was like an Aladdin’s cave of old tech, magazines and football programmes.  Now I know the saying that one man’s rubbish is another man’s gold but I was generally surprised when Mrs TTF was aghast at the contents of the boxes.

In order to keep the peace I agreed that I would look through the boxes and decide what I wanted to keep.  As expected my initial response of everything was rejected.  When my progress was checked on an hour later I was still reading through the Tiverton Town v Orient FA Cup first round programme from 1994.  My anecdote of the wall collapsing was met with a response that can be translated into hurry up or they are going in the bin.

After a couple more hours I had separated the NES, Megadrive and Playstation from the Game Gear, Atari Lynx and Amiga.  Console related magazines and FHM were put in order with fond memories of joystick bashing (the console magazines not FHM!) still fresh.  I then went for a well-earned rest…on my return I found Mrs TTF throwing them in the bin.  With a resounding NOOOOOOOOOOOOOOOOO!!!!!!! I explained that I would be selling them on EBay and took about carefully cataloguing the items on an online auction site.

She looked at me as if I was mad (which isn’t an unusual occurrence).  After two weeks I had sold most of the items for a tidy sum for little effort (Mrs TTF is in charge of the packing department).

Now my experience of selling stuff lying around the house deviates from my mate DDD who regularly acquires car parts, tents and paintball masks (Don’t ask) to sell on for a profit.  Technically there is the argument that he should be paying tax on the money he makes and HMRC have woken up to this!

So why does DDD have to pay tax and I don’t?

The Tax Bit

A person who trades in the UK is subject to income tax and national insurance on their trading income.  Very briefly (The longer story involves toilet rolls and Norman Wisdom) the following activity is treated as trading:

  • sell goods you have bought for resale
  • make items yourself and sell them, intending to make a profit
  • sell (or buy) goods on behalf of others for financial gain (for example on commission)
  • provide a service and receive payment (whether in cash or in kind).

You will be ok if you

  • sell occasional, unwanted personal items through Internet auctions or classified advertisements
  • attend a car boot sale once a year to sell unwanted household items.

Today is the deadline for online traders to make disclosure and settle their liabilities under the e-market place campaign.  If you are reading this and not registered for the scheme it is too late to enter but you should consider registering voluntarily to avoid higher penalties which can be as high as 70% of the tax if you have not deliberately tried to conceal the tax.

More information can be found or ask below.

Unfortunately my Orient programmes didn’t reach their reserve price of £1,000,000 so there are no tax issues for me!

Peter Cross

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