HMRC to start monitoring sellers on Vinted, eBay and other online platforms

[Somatosensational]

https://www.theguardian.com/money/2024/jan/01/selling-goods-online-be-warned-hmrc-will-soon-know-about-it

I wonder how long it will be before people having a clear out or selling their car have their benefits stopped.

TBH I was surprised they didn't do this already. I've always assumed that anything financial loses its capacity for privacy the moment the internet is involved.

Can't see what the problem is. HMRC have always taken steps to check the veracity of people's declared tax affairs. All they're doing here is updating the process in line with the realities of modern commerce.

as a PP mentioned it's not really people selling one off items of any type they are after. It's those offering items in a range of sizes and colours so obviously not 'preloved' goods.

If you make enough of an income that puts you into a bracket in which you should be paying tax, you should be paying tax. It's as simple as that. It really makes me roll
me eyes when people yell about greedy tories, what about people on benefits etc, if you don't pay your fair share of tax, you are not contributing to a fair society. I've just had an absolutely eye watering tax bill and will have to cut down on lots of fun things because of it. There we are-no tax, no NHS/schools/social care.

If you're just selling your personal stuff, you're very unlikely to reach the threshold which will attract any tax liability.

If you’re sure about that.

It feels like yet another opportunity to penalise and scrutinise the worst-off, to me, added to the decision to monitor benefits claimants’ bank accounts meanwhile turning a blind eye to tax dodgers.

Yes I had my UC claim reviewed not long ago, and they asked for my PayPal statement.

Meh. If it’s a business then fair enough.

ive always wondered why they don’t tax lottery wins and other windfalls like that though. Surely if you win £25 million on the lottery you should pay something..?

You're allowed to have a clear out. You can make whatever amount on clear out stuff, that isn't the issue.

They are looking for commercial selling - a business- buying to sell - and to catch their attention you would need to be doing a lot of it.

They've been talking about this for years and years. I can't see how it will work without people getting caught in the crossfire who shouldn't be. They say they're looking for people receiving more than £1000 a year, but that could easily be someone selling their personal possessions.

It's possible that someone could have a turnover of £1000+ in a year from selling personal possessions, but that wouldn't mean there would be a tax liability. In the vast majority of those cases the possessions would be sold at a loss, simply because second hand goods are cheaper than new. So if HMRC did insist on them making a tax return there would be no tax to pay anyway.

And if HMRC did view such activities as a "business", the income and expenditure would be cumulative for the whole year: ie, if you sell ten items and for some reason one of them makes a profit, it would still be offset by the losses made on all the others.

So the very worst that being "caught in the crossfire" would mean is an increase in bureaucracy. In practice however, I very much doubt HMRC would use this to get people registered as businesses who really aren't. HMRC hate unhelpful bureaucracy as much as anyone, particularly when it costs them in man hours and overhead to process without actually bringing in any more tax receipts. There's no reason they would want to get a whole load more people submitting SE tax returns and then paying nothing.

Just don’t run a business and claim it’s personal?

Meanwhile on our high street there’s a hairdresser who insists on cash or bank transfer (to Croatia) and a nail bar and two take aways cash only.

20 American Candy shops on Oxford St, a vape shop every 50m, empty barbershops by the dozen.

TBH if selling platforms want to operate here then I have no issue with HRMC forcing them to provide information. These platforms avoid paying UK tax at every opportunity (especially Airbnb), do the bare minimum of customer service, and reap vast rewards from users. Let them do some legwork.

Because the way the UK tax system works is that for all gains you potentially have allowances you can offset. To tax the lottery you'd have to allow people to offset any gambling losses they'd made too. You would, however, be substantially taxed on the interest you'd make on winning £25 million.

Actually regarding my last post, it would be even worse than that from HMRC's point of view. If casual selling of household items were suddenly called "business", then a lot of people who DO have self employed businesses could integrate both "businesses" for tax purposes and make a lower paper profit or even a loss. It would be a massive own goal on HMRC's part.

Thanks! I'd always wondered about this too but that makes complete sense.

100%

PIck on the little guys trying to scrape a living, protect their wealthy friends and themselves.

I'm an accountant and this was one of the first questions I asked my first boss when training, so I understand the curiosity 😂

Thank you! That has always bugged me!

HMRC can barely cope with their normal workload, weeks for UTRs to be issued, months for P87 claims to be paid out, they even closed their SA line for weeks back in the summer to focus on their horrendous backlog. I doubt they’ll redeploy staff to check on someone selling a bundle of 0-9 months girls clothes.

They are also going to be using information supplied by Airbnb so make sure people have declared that income.

They have employed an additional 40 full time new members of staff to deal with this. 40. At any one time, half of them will be on leave/off sick/in a meeting/in training.

I can't see how it can be done to be honest and I wouldn't spend a second worrying about it. In fact, I'm not gonna declare my Airbnb business. I'll risk it. Highly, highly unlikely to be found out.

Ebay differentiates between used and new items.

I'd wager that HMRC are looking for undeclared businesses rather than ordinary people shifting surplus stuff.

Surely, I can't be the only person to notice a preponderance of businesses on what was supposed to be a site for individuals?

If you bulk buy a fuck ton of stuff and resell it in online selling platforms then you are running a business and should pay appropriate taxes the same as everyone else. I know 2 people who sell loads online. One buys new items from discount retailers like home bargains and sells on eBay for small profits. It’s mainly pet supplies but some DIY and “home” things too. She doesn’t make much but she is a benefit claimant and I’m not sure where the line should be drawn with that. It’s not like she’s seen a bargain and thought “I could resell that for £5 more” and having a fiver - she’s doing it over and over and generating a small but consistent income. Is it ok if it’s £5 a month? What about £100 a month? What if she made £1000 a month? Is it fair that someone working in a part time job for £1000 a month pays more tax and is entitled to less government support than someone generating a £1000 a month income from selling online? I don’t think it is.

My other friend who sells massive amounts is a fashion queen. She buys loads from vinted but also buys loads new and sells it fairly quickly. Lots of her clothes she keeps only for a few weeks - lots is bought for a purpose and sold after one wear. She must has a higher turnover than my dog treat selling friend but will have a net loss as she buys lots new and sells used. She has a professional job and isn’t a benefit claimant. On paper her vinted income is probably many £1000s a year, but so is her vinted spending. HMRC could spend 3 seconds looking at her credit card spending in asos, Zara, JL, Boden etc and see that she just is a woman who updates her wardrobe with vigour.

I’ve had a huge declutter this year and sold about £2000 worth of stuff on vinted and eBay and marketplace. The most expensive thing was £250 - for something that retails at about £1200 new. Lots of kitchen appliances I don’t use sold at about 20-30% of their new value - LOADS of kids clothes - some quite smart “designer” adults clothes that were bought for special occasions. I’ve “lost” £1000s despite the occasional gain of selling something for a small amount more than I paid for it on vinted myself. If HMRC want to tax me on declutterring (they don’t) then I would process it all through DHs limited company and probably reduced his tax burden by more than I actually sold the stuff for.

When does the “little guy” online retailer spill over into “massive capitalist Tory”? Does it depend on the goods for sale? The mark-up? The turnover? The social class of the seller? If Michelle Mone sold her shit PPE on eBay would she be the persecuted underclass if she was asked to declare profits?

HMRC chasing tax avoiders. About time. Just don't stop at those selling on EBay and other selling sites, take on companies and places alleged to be money laundering such as vape shops.

No issue with paying any tax that is due. I only sell my own belongings but it’s second hand clothes that sell for less than they were purchased. Won’t attract tax even it goes over £1,000.00 Pa. But I do have an issue handing over my NI number to eBay. Who already have my name and DOB and other identifying information. What guarantee is there from eBay that data is safe. As soon as they ask for a NI number, I’ll stop using them, and as pp said, boot sale.

@MandyMotherOfBrian exactly. I won’t be handing my NI number over either.

I used to sell on eBay regularly and probably turned over £2-3k a year - but they were all mine and DC clothing shoes, toys, handbags etc, jewellery id got bored with - I always buy secondhand and aim to get back about what I’d spent in first place
I get bored easily especially with clothing
A few years ago I dieted away 6 stone and sold off all my bigger clothing

@EatMyHead I asked this question upthread! I’m self-employed with a completely different area from ‘retail’. I regularly sell clothes the kids have grown out of, or things I’ve impulse bought but not needed, etc. I do spend recklessly and then have to get rid of the clutter regularly, as I get overwhelmed by having too much stuff. (Thanks ADHD.) My items always sell for less than paid for originally.
if HMRC want to come after my eBay/vinted selling, more than happy to offset those losses against the sizeable chunk of my income I pay through SA!

lol, not gonna happen.
HMRC couldn’t monitor a car boot sale in their own car park. They haven’t the staff, the skills, or the inclination.