Topic: Airbnb, ebay, vinted and other apps to share more information with HMRC

[redbyrdz]

https://www.bbc.co.uk/news/business-67855872

Individuals have a £1,000 tax-free allowance for money made through property
There is also a £1,000 allowance for "trading" income - for example, if you offer tutoring or gardening, or if you are selling new or second-hand items online
People earning below those thresholds may not have to fill in a tax return, but should keep records in case they are asked for them
Adam Jay, chief executive of the second hand marketplace platform Vinted, told the BBC he did not believe the new rules would affect many of the site's sellers.

"It's actually quite a small proportion of users of our platform who will trigger this threshold where we need to provide information," he said.

Under the rules set out by the OECD, firms will not be asked to share data about sellers who make fewer than 30 transactions or €2,000 (£1,735) a year.

"It's only those people who are making a profit from selling second-hand items that might be eligible for tax and then it's about their own personal tax situation what tax would ultimately be due to HMRC," he said.

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Saw the above earlier. Apart from thinking, why don't you go after your rich tax-dodging mates instead of someone who makes a bit of extra income from selling old clothes on vinted, does anyone know how it actually works? I'm wondering what counts as "trading income". I sell the odd used thing I no longer need on ebay, usually I sell it for about half of what I paid for it, so I'm not actually making a profit. Or is that still a taxable income? I just think £1000 is not actually that much over a year if you have a few high-value items.

[Sudden Death Draft Loser]

It's an absolute disgrace.

Interfering bastards.

[Hedley Lamarr]

It's just a huge net to catch small fish.  If you make say £15k (profit) via online sales you should pay tax, why should you get away with it ?   If you're selling shit you own on Vinted or eBay, well , this is just ridiculous.

[Red-Soldier]

Going after the little man, whilst all the real tax dodgers go free.  Wankers!

A grand in a year, is nothing.  I've been having a good clear out lately, and have clocked up a fair amount.

[west_london_red]

If your selling things for less then you bought them your ok from what I read. The question though is if you sell something for a loss, can you write that off against your tax bill if you do a self assessment? Theoretically if they tax you for a profit you should be able to claim for a loss as you would if you were involved in any other trade.

[Sudden Death Draft Loser]

If your selling things for less then you bought them your ok from what I read.

How would they know?

[west_london_red]

Going after the little man, whilst all the real tax dodgers go free.  Wankers!

A grand in a year, is nothing.  I've been having a good clear out lately, and have clocked up a fair amount.

The irony of course being that eBay, Facebook and Amazon are probably the biggest tax dodgers in the country but they’ll happily grass the rest of us up!

[Hedley Lamarr]

Going after the little man, whilst all the real tax dodgers go free.  Wankers!

A grand in a year, is nothing.  I've been having a good clear out lately, and have clocked up a fair amount.

You're supposed to file a tax return if you earn £1k or more via self employed/sales anyway, all this does is make sure you have to do so.  For most this will mean nothing (1K in sales probably equates to £900 in purchases in normal cases), those who make a livelihood online and earn £20k say, then sorry, you should be paying tax.

[Hedley Lamarr]

How would they know?

Because you'd have the receipts for when you file your return I'd assume.

[west_london_red]

How would they know?

I’m guessing they’d look at how much your selling first of all, so someone like me who sells like one iPhone or iPad a year when I have upgraded they will just ignore, if your selling more then say a couple of grands worth in a year they will just write to you saying you might owe us some money and a brief reminder of the rules, if your selling £10k+ they’ll write a more firmer letter, and if you’ve sold £50ks worth of stuff they’ll insist on you completing a self assessment and warn you of the risks of not completely disclosing your business transactions.

[Hedley Lamarr]

I’m guessing they’d look at how much your selling first of all, so someone like me who sells like one iPhone or iPad a year when I have upgraded they will just ignore, if your selling more then say a couple of grands worth in a year they will just write to you saying you might owe us some money and a brief reminder of the rules, if your selling £10k+ they’ll write a more firmer letter, and if you’ve sold £50ks worth of stuff they’ll insist on you completing a self assessment and warn you of the risks of not completely disclosing your business transactions.

Things aren't much different (I'm senior partner in a practice) it's just essentially real time notification now.  If you've ever earnt £1k, outside of PAYE you should be filing a self assessment, now you'll have to. If you have no PAYE job but are selling online at over £1k you should have a UTR and file a self assessment.

In your example, getting a phone on upgrade and selling your old one will result in possibly a couple of hundred quid profit, carry on.  If you did this ten times, so it's £2k profit you should file a return.

[redbyrdz]

You're supposed to file a tax return if you earn £1k or more via self employed/sales anyway, all this does is make sure you have to do so.  For most this will mean nothing (1K in sales probably equates to £900 in purchases in normal cases), those who make a livelihood online and earn £20k say, then sorry, you should be paying tax.

Obviously if you make a lot of money and are running a business you should be paying tax. I think for example a lot of places on airbnb are business, rather than someone goung away for a month and renting their house out during that time. But the £1k threshold is pretty low, if they really just wanted to commercial sellers etc, it could be much higher.

[redbyrdz]

Things aren't much different (I'm senior partner in a practice) it's just essentially real time notification now.  If you've ever earnt £1k, outside of PAYE you should be filing a self assessment, now you'll have to. If you have no PAYE job but are selling online at over £1k you should have a UTR and file a self assessment.

In your example, getting a phone on upgrade and selling your old one will result in possibly a couple of hundred quid profit, carry on.  If you did this ten times, so it's £2k profit you should file a return.

Thats the bit I don't understand. If I buy a phone for £400 and sell it three years later for £200, I have to pay tax on the £200? I didn't make a profit. (Assuming its all over the tax thresholds etc)

[Hedley Lamarr]

Obviously if you make a lot of money and are running a business you should be paying tax. I think for example a lot of places on airbnb are business, rather than someone goung away for a month and renting their house out during that time. But the £1k threshold is pretty low, if they really just wanted to commercial sellers etc, it could be much higher.

Oh, I agree, that threshold is ridiculously low, in my opinion it should be around the 4K mark, I think that's when it stops being a hoppy and perhaps becomes income.  The main difference now, is that HMRC should now, if you're below thresholds (albeit a stupidly low one) you're fine, if eBay/vinted/uber is your job, you'll pay tax if you earn in excess of the allowance.

[SP]

In your example, getting a phone on upgrade and selling your old one will result in possibly a couple of hundred quid profit, carry on.  If you did this ten times, so it's £2k profit you should file a return.

Phones are a depreciating asset. If you are selling a phone you had from new, you will have made a loss. A couple of hundred quid for selling a phone you spent £800 quid on is a loss  with no CGT liability.

[Red Beret]

I'm thinking about the people on benefits who might be thinking of selling stuff like old clothes, or even jewellery online to try and make ends meet. Now the government want to tax that income??

[west_london_red]

I'm thinking about the people on benefits who might be thinking of selling stuff like old clothes, or even jewellery online to try and make ends meet. Now the government want to tax that income??

Second hand clothing should be ok because you’d sell it at a loss, and as for jewellery as long as it’s gold I hear Indian jewellery shops are very good at cutting back on unnecessary things like paperwork and receipts and things like that

[TepidT2O]

Some people make a living from eBay. Not a big one, but they buy and sell. Should pay tax

Air B n B is a big earner for some.  Again, they should be paying tax

[Hedley Lamarr]

I'm thinking about the people on benefits who might be thinking of selling stuff like old clothes, or even jewellery online to try and make ends meet. Now the government want to tax that income??

No, they don't, they wan't to be notified when people make a profit of over £1k so they can determine a tax liability, or loss, when people reach their tax threshold.  I think a few people are getting confused, if you sell stuff you own, that will be indeterminate, if you buy things deliberately to sell, that's a business and should be open to the normal tax liabilities

[BarryCrocker]

Threshold on eBay could potentially be based on volume of transactions sold.

Imagine acquiring (inheritance/gift/thrift) a Honus Wagner Baseball card by chance and then selling it for $1m.

Should you pay tax on that?

Same story with a record sold through Discogs. There's some hugely valuable items traded through that site.

[redbyrdz]

No, they don't, they wan't to be notified when people make a profit of over £1k so they can determine a tax liability, or loss, when people reach their tax threshold.  I think a few people are getting confused, if you sell stuff you own, that will be indeterminate, if you buy things deliberately to sell, that's a business and should be open to the normal tax liabilities

The problem I see is that they can't know if your making a profit or not, they only see your sales income. I guess the way the system is supppsed to work is that everyone who has a sales income over £1k then fills in a tax return, and HMRC then determine that you didn't make a profit and don't need to pay tax. But that will affect tons of people who aren't used to do tax returns, so they will get hassled and maybe fined over it. Also most people are unlikely to have receipts for stuff they bought years ago, maybe clearing out the loft or selling their kid's old stuff. At some point, it becomes easier just to put things into landfill, instead of trying to sell it on and navigating all the hurdles.

[west_london_red]

Some people make a living from eBay. Not a big one, but they buy and sell. Should pay tax

Air B n B is a big earner for some.  Again, they should be paying tax

As I said before, the problem is eBay and Air BnB makes a living from eBay and Air BnB and doesn’t pay its fair share of tax!

[Red-Soldier]

As I said before, the problem is eBay and Air BnB makes a living from eBay and Air BnB and doesn’t pay its fair share of tax!

Exactly.  Have a look where their offices are based/registered.  Perfectly legal, of course. 

[Red-Soldier]

It's just a huge net to catch small fish.  If you make say £15k (profit) via online sales you should pay tax, why should you get away with it ?   If you're selling shit you own on Vinted or eBay, well , this is just ridiculous.

Have a look where eBay, Amazon are based/registered, for tax avoiding purposes 

[.adam]

I work in tax for an online marketplace and the HMRC legislation is simply mirroring the EU legislation (DAC7) but is being implemented a year later.

I am currently working through our submission for EU Sellers which needs to be reported by the end of this month. It's a royal pain in the arse and has been very difficult to get hold of all the data and do all the verification checks required.

The EU legislation has exemptions for 'casual sellers'. If you sell make less than 30 sales in the year and make under 2,000 EUR in net sales (after commission etc.) then the platform is not required to report details about you.

[CornerFlag]

If you're buying for profit, then yeah, you should be paying taxes.  If you're just selling some of your old stuff for less than you paid for it, that's why they're saying to keep records I guess.  I don't necessarily see it as going after the small fry, because you know the system is going to be abused and people will spread multiple accounts everywhere to avoid paying what they should.

The goods and subsequent amount that is classed as "expenses" usually writes off a lot of tax owed anyway for the smaller businesses.

[redbyrdz]

I work in tax for an online marketplace and the HMRC legislation is simply mirroring the EU legislation (DAC7) but is being implemented a year later.

I am currently working through our submission for EU Sellers which needs to be reported by the end of this month. It's a royal pain in the arse and has been very difficult to get hold of all the data and do all the verification checks required.

The EU legislation has exemptions for 'casual sellers'. If you sell make less than 30 sales in the year and make under 2,000 EUR in net sales (after commission etc.) then the platform is not required to report details about you.

I can imagine it becoming even more of a pain, if the online apps report everyone who's over the threshold, and HMRC then have to get them to fill in a tax return. Many of those return will also have issues, simply because private sellers are not used to do them, and even if they end up having to pay some tax, it likely won't be worth the extra staff time needed to deal with it.

[CowboyKangaroo]

If your selling things for less then you bought them your ok from what I read. The question though is if you sell something for a loss, can you write that off against your tax bill if you do a self assessment? Theoretically if they tax you for a profit you should be able to claim for a loss as you would if you were involved in any other trade.

You can seek relief for losses - if it is a trade. If you only ever sell stuff for less than you paid, it unlikely to have the badges of a trade and therefore relief isn't available (especially considering that most of the time there is likely to be significant time between purchase and sale with low transaction volume).

HMRC are pretty clear that if you are just selling your personal crap (e.g. clearing out your attic), you are unlikely to be carrying on a trade unless the volume and price reaches a highly unlikely level.