Selling things online - HRMC, capital gains tax vs income tax

[JOEPRO]

Just as an update for this thread, HMRC have made the publication on 3 Jan 24 to clarify between trading, selling off unwanted items and separate link to capital gains to hopefully avoid confusion.

Check if you need to tell HMRC about your income from online platforms

Find out if you need to declare income from selling personal possessions, goods or services online, creating online content or renting out property using digital platforms.

www.gov.uk

I like how 5 of the 6 examples cited indicate they would be trading! What's the chances eh.

 

[JOEPRO]

Cash on collection it is then.
In my head that at least breaks the first link they have on selling your stuff online.
I'd say most on here will never fall foul of this nonsense as we only buy and don't sell anything on

Cash is king. Hence why certain organisations would very much prefer to eliminate it and probably will eventually.

Until then

 

[colnerov]

[ For tax, an ‘online marketplace’ is any digital platform (for example a website or mobile phone app) that handles and enables the sale of goods and services from individuals and/or businesses to customers. ]

Does that include this forum and it's 'for sale' section? Have the administrators on here been approached by HMRC about providing information about members?

Just because of paranoia does mean they are not out to get us.

 

[hotponyshoes]

[ For tax, an ‘online marketplace’ is any digital platform (for example a website or mobile phone app) that handles and enables the sale of goods and services from individuals and/or businesses to customers. ]

Does that include this forum and it's 'for sale' section? Have the administrators on here been approached by HMRC about providing information about members?

Just because of paranoia does mean they are not out to get us.

No.
This forum (and others like it) does not handle or market the sale in any meaningful way so will not be required to automatically provide details.

Hmrc do have the power to obtain the details but I'd think that would only come about if they are already investigating you or someone has grassed you up.

I'm sure eventually the ai software will start reading forum posts but I'd think the thousands of buy & sell groups on Facebook would be an easier target to aim at first.

 

[colnerov]

No.
This forum (and others like it) does not handle or market the sale in any meaningful way so will not be required to automatically provide details.

Hmrc do have the power to obtain the details but I'd think that would only come about if they are already investigating you or someone has grassed you up.

I'm sure eventually the ai software will start reading forum posts but I'd think the thousands of buy & sell groups on Facebook would be an easier target to aim at first.

For now.

 

[hotponyshoes]

For now.

For now...

I expect the idea is to get rid of cash.
Then all transactions will be done on an app with tax deducted automatically for everything...

 

[Smouser]

Things are definitely a little bit clearer.

I think the difficulty for an individual who is being queried by HRMC, will be to somehow prove that the goods were just for personal use, especially if you made a profit on some of it.
I have bought things over many years without having any original purchase price record of it, so a lot of the time I wouldn't even know if I made a profit or not. Never mind somehow proving/providing evidence to HRMC if being queried.

Not to mention the learning curve that an individual will have to go through with tax self-assessments and possibly also asking the help of an accountant if you sold things that exceeded the £1000 threshold.

I expect the idea is to get rid of cash.
Then all transactions will be done on an app with tax deducted automatically for everything...

Banks would love for cash to disappear too. £50 cash stays £50 no matter how many times it changes hands.

With digital currency, the banks/payment providers take a small cut of that £50 every time somebody pays by card in the form of a charge.
Eventually, the original £50 is all in the banks'/payment providers' coffins......

 

[Onthespotwelding]

Cash is freedom! Keep cash alive! Use it or lose it!

 

[sparkysy]

With digital currency, the banks/payment providers take a small cut of that £50 every time somebody pays by card in the form of a charge.

Absolutely, if someone pays me by card it costs me approximately 1.5% of the transaction to start with, let alone bank charges and the rest of it!
It amazes me how the younger generation pay with phones, smart watches ect and are stumped if it doesn't work.
Worst of it is if all the power goes off or phone network fails since Rona, a lot of places are stuffed and cannot trade!
I love cash, I know how much I have and when it's gone it doesn't cost me just to have an account with nothing in it

Our local batch van has a sign saying cash please, don't let the banks take any more of our hard earned cash!
Sy

 

[sg66]

Do you use the things you buy for business use or only personal use?

Makes no odds, it's the profit that counts, but if you sell things for less than you paid your not liable, who buys things for personal use and sells them for more than they paid.....

 

[Smouser]

Makes no odds, it's the profit that counts, but if you sell things for less than you paid your not liable, who buys things for personal use and sells them for more than they paid.....

Me, sometimes.
People sometimes sell used machines/tools/whatever for peanuts on FB marketplace. Sometimes, there are a few small faults or repairs needed. I use the machine for a period then either want to upgrade or get a different machine and I sell the machine on.
I could be the owner of a machine for anything between 6 months and 10 years.
Was it for personal use? Yes
Do I sometimes make a profit on it? Yes
Did I buy it purely to make a profit? No

Btw, does HRMC even take inflation into account to determine if you made a profit on an item or not?

 

[Pigeon_Droppings2]

Surely if it's paid for using personal money (ie not business or self employed money) then it's owned personally...and the sale comes under CGT?

Also if my total sales in a year are less than the annual CGT allowance I'm not going to stress I think.

 

[Smouser]

Surely if it's paid for using personal money (ie not business or self employed money) then it's owned personally...and the sale comes under CGT?

Also if my total sales in a year are less than the annual CGT allowance I'm not going to stress I think.

I think you still need to fill in a tax self-assessment if you go over £1000 in sales.
Even if you then do not get taxed on the sales because it was personal use items.

 

[sg66]

Me, sometimes.
People sometimes sell used machines/tools/whatever for peanuts on FB marketplace. Sometimes, there are a few small faults or repairs needed. I use the machine for a period then either want to upgrade or get a different machine and I sell the machine on.
I could be the owner of a machine for anything between 6 months and 10 years.
Was it for personal use? Yes
Do I sometimes make a profit on it? Yes
Did I buy it purely to make a profit? No

Btw, does HRMC even take inflation into account to determine if you made a profit on an item or not?

No they are just interested in profit, if you exceed 1k buying stuff and selling it then it's not un intentionally, your looking at a profit of 1k taking out what it cost you to buy it, now you may make a few quid here and there but you don't yearly make 1k profit by accident, and if you do, great, pay tax on it

 

[ukracer]

You don't have to pay capital gains tax on a personal car.

But, if you buy and sell many cars at a profit you have to prove you are not trading in cars otherwise you have to pay income tax.

I can belive you that you can buy cars from remote areas, get bored of them quickly and sell them on a few months later for a profit.
But it's not me you will have to convince of that

What if you have ADHD?

 

[sg66]

What if you have ADHD?

You will become obsessed with, A paying it, B avoiding it, C being very confused.

 

[addjunkie]

You don't have to pay capital gains tax on a personal car.

But, if you buy and sell many cars at a profit you have to prove you are not trading in cars otherwise you have to pay income tax.

I can belive you that you can buy cars from remote areas, get bored of them quickly and sell them on a few months later for a profit.
But it's not me you will have to convince of that

years ago, you could do 5 cars tax free once you sold the sixth you were supposedly a trader….but like most things it was abused…Mrand Mrs for example.

 

[ukracer]

You will become obsessed with, A paying it, B avoiding it, C being very confused.

I asked as my son used to not only buy a new car almost weekly he would be using the hobby to get a better car for the hobby.

 

[Shedendman]

You'll own nothing,you will be happy
Said this a few times,has the penny dropped yet?

 

[sg66]

I asked as my son used to not only buy a new car almost weekly he would be using the hobby to get a better car for the hobby.

That's great and if he spreads the sales across multiple platforms you may get away with it, sell 30 cars on eBay, your a trader.