Selling and HMRC after Jan 1st
Discussion
Just in case people are not aware, the above is lifted from today’s Money section in The Times. It may be relevant to selling parts on a regular basis. (I am not a tax lawyer or accountant, for info only)
….
‘From January 1, online marketplaces and digital platforms will be legally required to collect data on sellers and their income, and pass it to HMRC.
Everyone has a tax-free trading allowance of £1,000 a year, which covers income from casual sources outside of a main job and includes selling goods online. But anything you make above this allowance, if you have exceeded the £12,570 personal tax-free income limit, will trigger a tax bill and you will need to fill in a self-assessment return.
(Selling personal possessions such as furniture, paintings or crockery also comes with an additional “chattels” allowance — typically HMRC does not need to know about this type of income unless more than £6,000 is made from the sale of a single item.)’
….
‘From January 1, online marketplaces and digital platforms will be legally required to collect data on sellers and their income, and pass it to HMRC.
Everyone has a tax-free trading allowance of £1,000 a year, which covers income from casual sources outside of a main job and includes selling goods online. But anything you make above this allowance, if you have exceeded the £12,570 personal tax-free income limit, will trigger a tax bill and you will need to fill in a self-assessment return.
(Selling personal possessions such as furniture, paintings or crockery also comes with an additional “chattels” allowance — typically HMRC does not need to know about this type of income unless more than £6,000 is made from the sale of a single item.)’
Good luck policing that. They can’t even police blatant fraud and other illegal activities on most e selling sites, e-bay, marketplace, gumtree let alone monitor who’s selling what and send of tax bills for HMRC.
I’m surprised the likes of eBay don’t just tell HMRC to FO and that it’s not their job. It’s the sellers responsibility to file their own self assessments.
I’m surprised the likes of eBay don’t just tell HMRC to FO and that it’s not their job. It’s the sellers responsibility to file their own self assessments.
Yesterday UK Column News linked the HMRC Helpline going and all inquiries having to be done online with everyone having to have a Digital ID.
Perhaps it'll be a Digital ID and Vaccine Passport? Will Social Credit scores get points for querying whether posts on PH are the work of AI chatbots?
Perhaps it'll be a Digital ID and Vaccine Passport? Will Social Credit scores get points for querying whether posts on PH are the work of AI chatbots?
carinaman said:
Yesterday UK Column News linked the HMRC Helpline going and all inquiries having to be done online with everyone having to have a Digital ID.
Perhaps it'll be a Digital ID and Vaccine Passport? Will Social Credit scores get points for querying whether posts on PH are the work of AI chatbots?
What do you mean ‘whether’ ? Cast-iron certainty!Perhaps it'll be a Digital ID and Vaccine Passport? Will Social Credit scores get points for querying whether posts on PH are the work of AI chatbots?
In relation to this, i've been pondering something for a while on and off and i'm sure a knowledgeable Pistonheader will know the answer:
If someone works full time and pays tax on a PAYE basis then sets up a business, as a hobby where they make something and decide to sell it but they are losing money on each sale when all costs are factored in, say for example they do it for the enjoyment rather than as a legitimate business interest where does that leave the tax liability? I can see an argument it isn't really a business but with the new rules in theory HMRC would want a self assessment.
In my very simplistic view there's an argument the persons tax burden should actually be reduced on their PAYE tax code because their overall income is lowered by the side business?
Edit- Never mind I found the answer with Google,
https://smallbusiness.co.uk/offsetting-losses-agai...
If someone works full time and pays tax on a PAYE basis then sets up a business, as a hobby where they make something and decide to sell it but they are losing money on each sale when all costs are factored in, say for example they do it for the enjoyment rather than as a legitimate business interest where does that leave the tax liability? I can see an argument it isn't really a business but with the new rules in theory HMRC would want a self assessment.
In my very simplistic view there's an argument the persons tax burden should actually be reduced on their PAYE tax code because their overall income is lowered by the side business?
Edit- Never mind I found the answer with Google,
https://smallbusiness.co.uk/offsetting-losses-agai...
Edited by Jamescrs on Saturday 9th December 11:48
Jamescrs said:
In relation to this, i've been pondering something for a while on and off and i'm sure a knowledgeable Pistonheader will know the answer:
If someone works full time and pays tax on a PAYE basis then sets up a business, as a hobby where they make something and decide to sell it but they are losing money on each sale when all costs are factored in, say for example they do it for the enjoyment rather than as a legitimate business interest where does that leave the tax liability? I can see an argument it isn't really a business but with the new rules in theory HMRC would want a self assessment.
In my very simplistic view there's an argument the persons tax burden should actually be reduced on their PAYE tax code because their overall income is lowered by the side business?
Surely that would depend on how the business side was set up? I have long since left all that!If someone works full time and pays tax on a PAYE basis then sets up a business, as a hobby where they make something and decide to sell it but they are losing money on each sale when all costs are factored in, say for example they do it for the enjoyment rather than as a legitimate business interest where does that leave the tax liability? I can see an argument it isn't really a business but with the new rules in theory HMRC would want a self assessment.
In my very simplistic view there's an argument the persons tax burden should actually be reduced on their PAYE tax code because their overall income is lowered by the side business?
Jamescrs said:
In my very simplistic view there's an argument the persons tax burden should actually be reduced on their PAYE tax code because their overall income is lowered by the side business?
Interesting idea, the taxpayer funds your hobby, or could be set against expenses, might be worth asking MP's for guidance there, ref moats stables employing family in non jobs.
Jamescrs said:
In relation to this, i've been pondering something for a while on and off and i'm sure a knowledgeable Pistonheader will know the answer:
If someone works full time and pays tax on a PAYE basis then sets up a business, as a hobby where they make something and decide to sell it but they are losing money on each sale when all costs are factored in, say for example they do it for the enjoyment rather than as a legitimate business interest where does that leave the tax liability? I can see an argument it isn't really a business but with the new rules in theory HMRC would want a self assessment.
In my very simplistic view there's an argument the persons tax burden should actually be reduced on their PAYE tax code because their overall income is lowered by the side business?
Edit- Never mind I found the answer with Google,
https://smallbusiness.co.uk/offsetting-losses-agai...
I remember Chris Moyles tried claiming he was a second hand car dealer that lost loads of money to avoid tax back in the dayIf someone works full time and pays tax on a PAYE basis then sets up a business, as a hobby where they make something and decide to sell it but they are losing money on each sale when all costs are factored in, say for example they do it for the enjoyment rather than as a legitimate business interest where does that leave the tax liability? I can see an argument it isn't really a business but with the new rules in theory HMRC would want a self assessment.
In my very simplistic view there's an argument the persons tax burden should actually be reduced on their PAYE tax code because their overall income is lowered by the side business?
Edit- Never mind I found the answer with Google,
https://smallbusiness.co.uk/offsetting-losses-agai...
Edited by Jamescrs on Saturday 9th December 11:48
https://www.theguardian.com/media/2014/feb/21/chri...
MesoForm said:
I remember Chris Moyles tried claiming he was a second hand car dealer that lost loads of money to avoid tax back in the day
https://www.theguardian.com/media/2014/feb/21/chri...
I get the point but I think the difference is Moyles never had any involvement in the buying or selling of the cars, it was purely a tax dodge. https://www.theguardian.com/media/2014/feb/21/chri...
I’m more thinking of an individual who is actively doing something be it knitting, 3D printing or baking cakes and then selling the end product because they enjoy the process.
HMRC guidelines indicates 10 hours of activity per week in the link I posted above.
I suppose I’m playing devils advocate because previously people who wouldn’t have been bothered will potentially now have to submit tax returns and it could have the inverse effect of actually costing the HMRC money, especially if they are smart about it and start putting in their mileage travelling for materials, claims for electricity used, phone bills for selling etc.
Jamescrs said:
I get the point but I think the difference is Moyles never had any involvement in the buying or selling of the cars, it was purely a tax dodge.
I’m more thinking of an individual who is actively doing something be it knitting, 3D printing or baking cakes and then selling the end product because they enjoy the process.
HMRC guidelines indicates 10 hours of activity per week in the link I posted above.
I suppose I’m playing devils advocate because previously people who wouldn’t have been bothered will potentially now have to submit tax returns and it could have the inverse effect of actually costing the HMRC money, especially if they are smart about it and start putting in their mileage travelling for materials, claims for electricity used, phone bills for selling etc.
We should all try it and really screw them over I’m more thinking of an individual who is actively doing something be it knitting, 3D printing or baking cakes and then selling the end product because they enjoy the process.
HMRC guidelines indicates 10 hours of activity per week in the link I posted above.
I suppose I’m playing devils advocate because previously people who wouldn’t have been bothered will potentially now have to submit tax returns and it could have the inverse effect of actually costing the HMRC money, especially if they are smart about it and start putting in their mileage travelling for materials, claims for electricity used, phone bills for selling etc.
Pica-Pica said:
From January 1, online marketplaces and digital platforms will be legally required to collect data on sellers and their income, and pass it to HMRC.
Everyone has a tax-free trading allowance of £1,000 a year, which covers income from casual sources outside of a main job and includes selling goods online. But anything you make above this allowance, if you have exceeded the £12,570 personal tax-free income limit, will trigger a tax bill and you will need to fill in a self-assessment return.
This is nothing new.Everyone has a tax-free trading allowance of £1,000 a year, which covers income from casual sources outside of a main job and includes selling goods online. But anything you make above this allowance, if you have exceeded the £12,570 personal tax-free income limit, will trigger a tax bill and you will need to fill in a self-assessment return.
This refers to trading, i.e buying items with the intention to sell at a profit above the £1000 turnover limit, which is tax free. Anything above £1,000 should be accounted for accordingly, in line with HMRC rules.
You can still sell as many private/ personal items as you like without the need to pay tax. eBay may pass on the details to HMRC, but if it is genuinely a private/ personal sale, there is nothing to worry about.
They put out a similar "warning" every year to attempt to scare the multiple "private/personal sellers", who clearly are not, selling 100x of the same item and raking in £0000's a month. This is who HMRC are interested in.
Edited by MattsCar on Saturday 9th December 13:24
MattsCar said:
Pica-Pica said:
From January 1, online marketplaces and digital platforms will be legally required to collect data on sellers and their income, and pass it to HMRC.
Everyone has a tax-free trading allowance of £1,000 a year, which covers income from casual sources outside of a main job and includes selling goods online. But anything you make above this allowance, if you have exceeded the £12,570 personal tax-free income limit, will trigger a tax bill and you will need to fill in a self-assessment return.
This is nothing new.Everyone has a tax-free trading allowance of £1,000 a year, which covers income from casual sources outside of a main job and includes selling goods online. But anything you make above this allowance, if you have exceeded the £12,570 personal tax-free income limit, will trigger a tax bill and you will need to fill in a self-assessment return.
This refers to trading, i.e buying items with the intention to sell at a profit above the £1000 turnover limit, which is tax free. Anything above £1,000 should be accounted for accordingly, in line with HMRC rules.
You can still sell as many private/ personal items as you like without the need to pay tax. eBay may pass on the details to HMRC, but if it is genuinely a private/ personal sale, there is nothing to worry about.
They put out a similar "warning" every year to attempt to scare the multiple "private/personal sellers", who clearly are not, selling 100x of the same item and raking in £0000's a month. This is who HMRC are interested in.
Edited by MattsCar on Saturday 9th December 13:24
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