How much can you sell on ebay without getting done for tax?
Not sure on the rules of this, but how much is allowed to be sold before paypal report you?
Im taking about 2k worth of stuff over 3 months? Its not my own stuff, im making it and selling it, so mine in theory, but when does the tax man come knocking on my door?
Im taking about 2k worth of stuff over 3 months? Its not my own stuff, im making it and selling it, so mine in theory, but when does the tax man come knocking on my door?
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Comments
If you say nothing they are unlikely to find out.
1. You are taxed on profit not sales
what is your profit on raw materials and overheads.
2 Dont forget Value Added Tax
3 This is clearly not your own stuff you are selling.
Ie: you are not selling things you own that you no longer need.
You are clearly opperating a small bussiness
4.An accountant would advise you what you could claim against tax. Such as part of your transport costs, heating, rates,
Unless you are being investigated by the Inland Revenue or the Benefits Agency, nobody
is monitoring your bank account.
Never occured to us and we were selling for the OH's Grandparents. If we'd have known it was going to be that high we wouldn't have bothered since we didn't technically make any money from the sale. We buy off it more than sell and it wasn't made very clear to us at any point.
You are operating a business so you are liable to tax on any profits. You have to declare it as a business to HMRC whether you make money or not. If you do not and they find out you are liable to the tax plus penalties and interest.
How much would you have been charged if you'd used other means to sell such as an advert in the paper? How much did you expect to be charged?
Not £45
A|s I said, just under ten per cent of the sale price. It's a standard fee: if you'd sold at a physical auction you'd hav e been charged the same, or more. It's simple maths. Even simpler now that they have actually raised the fee to a straight ten per cent: if you earn £1.00, they take 10p, if it's £100 they take ten pounds. They're in it to make money, like any auction house.
If you are making just 4 items and selling them at £500 each over 3 months, it is unlikely that ebay will spot or insist that you are a business. If they do, they will insist on you changing your ebay seller account to a business account, and be subject to all the same legislation as any other retailer. Paypal do not pass your details to HMRC, you don't need to charge VAT. If this becomes a regular business, then you will need to review how you operate.
A few weeks ago I was talking to a lady who makes her living by selling on eBay, and I asked her what she thought of people who complain about eBay fees. Her reply was, "They should try selling in an ordinary auction." Your mistake was to sell on eBay without checking the fees, and that was your fault and not eBay's.
I agree. I think the problem a lot of the time is that because it's online, people sometimes don't regard ebay as a 'proper' auction: it's seen as somewhere you should be able to sell for nothing, buy for next-to-nothing, and if you donb't feel like paying for a purchase for a week and a half, well, that's fine, too. Unfortunately, that isn't actually the case. It's a business, used by traders who are trying to earn a living from it.
You can get that limit removed with one phone call.
Intelligent answer.
As long as the OP realises they are breaking the law by not informing HMRC.
http://www.theregister.co.uk/2007/02/09/ebay_uk_traders_tax_guidance/
Not necessarily. It depends if you want to sell 4 items made as a hobby and argue that it isn't a business. It's not quite so black and white. I'd say nothing, unless it was intended that the sale of these items would be an ongoing venture. If I made four bird tables out of scrap wood and decided to flog them on ebay, that isn't a business is it?
I'm afraid it is a business. ANYTHING you make with the purpose of selling, is technically a business venture. If, on the other hand, you make for yourself, then after using it for a while, decide to sell it as 'used', it isn't a business venture.
Not necessarily as I said, whether it is classed as a business would depend on the frequency and quantity of goods sold. The OP may well be liable for capital gains taxes, but the allowances means probably not. He just said he would be selling £2,000 worth of goods, over a 3 month period, at 4 x £500 payments. It is very unlikely that either ebay or HMRC would declare this as a business with an ongoing liability.
You are incorrect. HMRC's definition is if you are making things with the intention of selling them or buying things with the intention of selling them. It doesn't matter what scale it is on.