The Tax man And selling on eBay or Etsy ect

[adigra]

Post #4 already mentioned this, but here is a direct link to how HMRC view personal possessions with a limited life span of less than 50 years, including watches:

https://www.gov.uk/capital-gains-tax...mited-lifespan

So even if you have a collection of Rolexes, as long as they are a personal possession and haven't been used in business, either as stock, or somehow as a tool (timing yourself doing your trade?), then you're fine to sell them without reporting. However, HMRC, as they have always been able to, might see a large amount incoming and ask you about it. Highly unlikely as it is, this has always been the case, ebay or no ebay.

[chrisjones3]

If I recall correctly CGT is not due on a profit on the sale of private watches. I think artwork fell in the same category?

However if you sell 20 watches on retirement let’s say, then I guess there would be some questions asked on the volume that could probably be supported that they were acquired over several decades and being sold to fund retirement.

Versus getting into the watch business and buying to sell, where the difference between the sales price and purchase cost + expenses, would be a taxable trading income.


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[draftsmann]

If I recall correctly CGT is not due on a profit on the sale of private watches. I think artwork fell in the same category?

However if you sell 20 watches on retirement let’s say, then I guess there would be some questions asked on the volume that could probably be supported that they were acquired over several decades and being sold to fund retirement.

Versus getting into the watch business and buying to sell, where the difference between the sales price and purchase cost + expenses, would be a taxable trading income.


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Watches are considered “machinery” and as such wasting assets, hence outside the scope of CGT. The same goes for classic cars.

No such general exemption for works of art.

[deepreddave]

Same as would be the case for a business I would guess. No receipts, no value, no input tax to claim back, £10k sale, tax on £10k to be paid to HMRC. Pre-owned goods have slightly different rules but same principle.

That's the hard stance for claiming input VAT as without a receipt there's no guarantee vat was suffered, however, for income tax purposes it is very different in that HMRC would need to consider any/all evidence you could provide to substantiate purchase costs including verbal/written testimony (which, if credible, carries the same weight as documentation, although HMRC sometimes needs to be reminded of this as they prefer paperwork).

In short, if you have been trading for many years and don't have records to support expenses, then you are entitled to claim for them all but the quantum would be open to reasonable judgment.

As has been said already, the only change here is the increased information being provided to HMRC, they've been targeting eBay sellers for years.

[chrisjones3]

Watches are considered “machinery” and as such wasting assets, hence outside the scope of CGT. The same goes for classic cars.

No such general exemption for works of art.

Thanks, I recall something else being in the same bucket. Must have been the classic cars! Could have been a tidy earner over the years - had I bought one…..


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[Onelasttime]

From the link posted in #9 above:

But in practice? I’m ignoring it and will see what happens, but if people start receiving tax return requests for shifting old stuff then, as I say, eBay and the like are dead.

Pathetic posturing by HMRC.

[kace]

The fact that they are not registered as a business account does not necessarily mean they are not paying the tax on it. Although it's fair to guess many don't.
My own account which I pay the tax on is registered as a private account. Why? Because with a business account you pay 36p (it may have gone up) every time you list an item, and you don't get the 80% off listing fee deals every fortnight. For someone like me who lists a few dozen low value items a week, many of which get listed a number of times before they sell, the 36p each time makes it untenable, and the 80% off the fees is often my profit. So I let my old business account wither on the vine and use my personal account instead, but still pay the tax.
Ebay rules actually state that if you buy stuff to sell, which I obviously do, your account should be a business account but they don't enforce this. Yet.

Interesting, I hadn't thought of it in those terms


This will make the investigation of side hustles much easier though, which in some cases must be costing huge amounts in lost taxes.

[Ruggertech]

Interesting, I hadn't thought of it in those terms


This will make the investigation of side hustles much easier though, which in some cases must be costing huge amounts in lost taxes.

Indeed. I personally believe its the ones who have been selling many items, often similar, watches or coins for instance, for a long period of time that will get hit. Not so much someone selling off their watch or coin collection or whatever over a period of a few weeks or months who then stop.

[watchlovr]

Post #4 already mentioned this, but here is a direct link to how HMRC view personal possessions with a limited life span of less than 50 years, including watches:

https://www.gov.uk/capital-gains-tax...mited-lifespan

So even if you have a collection of Rolexes, as long as they are a personal possession and haven't been used in business, either as stock, or somehow as a tool (timing yourself doing your trade?), then you're fine to sell them without reporting. However, HMRC, as they have always been able to, might see a large amount incoming and ask you about it. Highly unlikely as it is, this has always been the case, ebay or no ebay.

This is correct and accurate.
Already tested by me through a large sale. Discussed afterwards with my accountant who asked hmrc for guidance.

[snowman]

Unfortunately the "bigger fish" squirrel the money away via loop holes,

Daft publicity stunt to make you think the government care about the big tax evaders.

M

[squashy1]

I think if the goods are your property ie owned by you your be ok I just hope the spoof car dealers on marketplace get their collars felt.Just read they are employing an extra WAIT FOR IT 24 yes 24 full-time staff to enforce this new measure so no worries then 23 of them will be working from the beach!
Squashy1

[Kingstepper]

I think if the goods are your property ie owned by you your be ok I just hope the spoof car dealers on marketplace get their collars felt.Just read they are employing an extra WAIT FOR IT 24 yes 24 full-time staff to enforce this new measure so no worries then 23 of them will be working from the beach!
Squashy1

That’s not correct, who else might the goods be owned by?

[draftsmann]

I think if the goods are your property ie owned by you your be ok I just hope the spoof car dealers on marketplace get their collars felt.Just read they are employing an extra WAIT FOR IT 24 yes 24 full-time staff to enforce this new measure so no worries then 23 of them will be working from the beach!
Squashy1

The stock-in-trade of a sole trader will be his or her property in the great majority of cases, and those are the people these measures are intended to catch, or at least persuade to change their behaviours.

HMRC does publish quite extensive guidance as to what constitutes trading. It should provide reassurance to those who have been left concerned by recent headlines on this subject.

[beechcustom]

It's covered pretty comprehensively in the latest MSE mailing:

https://www.moneysavingexpert.com/ne...b-report-hmrc/

"It's important to note that the rules around who pays tax on earnings made from digital platforms have NOT changed. If you didn't owe any tax on these earnings before, and you continue to use these platforms the same way, you won't have to start paying tax on them now.

What has changed is that HMRC can more easily find out what people are making on digital platforms, so now is a good time to check if you owe tax or if you may do so for future earnings."

[blackal]

[MartynJC (UK)]

Post #4 already mentioned this, but here is a direct link to how HMRC view personal possessions with a limited life span of less than 50 years, including watches:

https://www.gov.uk/capital-gains-tax...mited-lifespan

So even if you have a collection of Rolexes, as long as they are a personal possession and haven't been used in business, either as stock, or somehow as a tool (timing yourself doing your trade?), then you're fine to sell them without reporting. However, HMRC, as they have always been able to, might see a large amount incoming and ask you about it. Highly unlikely as it is, this has always been the case, ebay or no ebay.

What about items (watches) with a lifespan greater than 50 years - so ones that were manufactured / sold before 1974? Does the limited lifespan exception apply? Patek catch phrase implies they last longer than 2 generations...

"You don’t have to pay Capital Gains Tax on personal possessions with a lifespan of less than 50 years. This covers all machinery, and includes things like antique clocks or watches."

[Kingstepper]

What about items (watches) with a lifespan greater than 50 years - so ones that were manufactured / sold before 1974? Does the limited lifespan exception apply? Patek catch phrase implies they last longer than 2 generations...

"You don’t have to pay Capital Gains Tax on personal possessions with a lifespan of less than 50 years. This covers all machinery, and includes things like antique clocks or watches."

An antique is over 50 years old.

[adigra]

What about items (watches) with a lifespan greater than 50 years - so ones that were manufactured / sold before 1974? Does the limited lifespan exception apply? Patek catch phrase implies they last longer than 2 generations...

"You don’t have to pay Capital Gains Tax on personal possessions with a lifespan of less than 50 years. This covers all machinery, and includes things like antique clocks or watches."

Very interesting question, so I did a bit of reading. Luckily HMRC have it defined (to my surprise):

"Plant and machinery: All plant and machinery is always regarded as having a predictable life of less than fifty years. Such items will always be wasting assets. This rule applies no matter what the actual life of the item of plant or machinery proves to be."

[David_D]

A pal of mine ,who I keep in touch with sporadically, made himself busy buying and selling on Ebay . He called a while ago , after a long but not unusual absence. I said " Hello B*****, where have you been, in nick ?" He did 6 weeks for something or other related to his " hobby". Probably a bit of a result, food, heating etc.... included.

He’s definitely done more than a bit of undisclosed eBay dealing then! Jail time would be for maybe selling counterfeit goods - or a repeat tax evasion offence.

[ktmog6uk]

I saw this too and have been wondering about its application. I plan to begin selling down a significant record collection when I retire, it has all been bought privately and owned for years.

How will this will apply to clothes, records, or watches as these are wasting assets, you cannot claim depreciation on them so how can the Gov expect to come looking for tax on profits? Seems like a scare tactic to me perhaps to intimidate those who are running legitimate businesses under the radar.

If they looked through my feedback on eBay they’d see how much I’d spent on vinyl over the years and certify me insane!