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.

I can't see it actually happening in an inconvenient way, the same way hmrc aren't going after the million/billionaire tax avoiders. It's a scare headline and empty threat.

Maybe somewhere like Etsy with the hundreds of shops selling cricut crafts will start to see sellers asked to self asses. I imagine a lot aren't declaring. But at the same time most probably aren't making that much.

The actual businesses avoiding tax on larger earnings aren't online, and will be cash payments.

You pay the tax as part of the cost of the ticket, ie your taxed on the bet not the winnings. Whilst this may seem counter intuitive it actually earns the government more tax than just taxing the winnings, due to all the fees, charity donations and wages which comes out of the ticket price (along with the tax bill) before the remainder is allocated for winnings, whereas when you tax the bet you get the tax on the whole cost of the bet (which the lottery is) before all deductions.

My parents made an absolute killing on Ebay, back in the very early 00s, when Ebay was pretty new.
They were selling books to Americans, on niche hobbies. Doesn't sound like an instant money-maker. But it earnt enough for 4 of us to have a very high-end 2-week touring holiday to western Canada, and then some.

It’s a new law
followed on from the new law in the Eu called DAC7 . If you search that you will understand what it means

its already in place in the EU has been since Jan 2023 - loads of people on digital platforms in the EU are kicking off because they have only been told recently that they have to supply tax ref numbers / or National insurance equivalent and home address and if they don’t supply the details they can’t use the platform until they hand it over and they

its for people who sell on digital platforms
sales of goods
Fixed property
personal services
transport ( so Uber and similar )

The uk has just started the same for platforms like eBay Amazon Etsy Uber eats deliveroo fiver basically any uk based that has sellers on it
The platform have to collect info on sellers on the platform on how much they have earned via selling on the platform and report this back to HMRC in Jan. 2025

it starts today - runs till Dec 24 and details are sent to HMRC in Jan 2025

if a seller won’t give their details which are
address
NI number or tax ref
then the seller is blocked from using the platform till they hand it over and they can withhold any money that is owed

The overall plan is that eventually all digital platforms report earnings to tax department of wherever the seller is based so eventually EU platforms will report to the UK and likewise

So someone who is using AirnB to advertise a property in Spain and lives in say the USA
airb ( Spain ) will report how much the person has made in total via the platform to the american tax authorities.

I recently read a post where an american guy had a property in Spain and asked if the person renting it would go off platform to pay for it as if he was to go via the platform the platform will report that as a booking even though he is based in the USA

On EU platforms Occasional sellers who sell less than 30 item or less than 2000 euros won’t be reported as a seller
but I don’t know if that applies to the uk as well

If you're a business buying and selling things then you need to keep records of what you paid for them, along with all other expenses. The difference between that and what you gain from selling them is your taxable profit.

HMRC can't just come along one day and decide that a SINGLE TRANSACTION is taxable. The transaction is either a being made by a business (in the widest sense, including sole traders) or an individual. HMRC deciding that the transaction is taxable is part and parcel of deciding that that person is actually running a business, in which case ALL their similar transactions become taxable as well, and they have to do all the usual bookkeeping of a business in connection with this.

The point being that there is no possible reason why HMRC would want to do this for a bunch of transactions that are, overall, going to make a humungous loss. They would just be massively increasing their own work while not gaining any tax receipts and in many cases giving people opportunities to reduce their overall tax.

With all due respect, you need to learn how taxation works - and this isn’t a Tory policy.
It’s how taxation has worked since it was created; tax can be levied multiple times during a product’s lifespan.

There's an issue with social media influencers and 'gifts'. There are plenty who are being paid to do an advert for a product, as well as being given the product for free. A few months later they sell the product so make a higher sum than what they were paid and taxed for the advert.

Doubt it will happen but selling stuff and generating income is no different than working and claiming benefits

I doubt they’ll be interested in people selling a handful of old clothes but people do sell and make £1000’s there’s loads of hacks on line
there was one other day buying air fryer form Tesco 1/2 price for £60 then selling for £90
he bought 10 that’s £300

It will be the people that sell lots of stuff usually bought cheaply and sell it on, usually buy it now and new with tags, I have seen sellers with loads of stuff from places like the Next sale that they sell at higher price. People also buy Emma Bridgewater type things in the sales and sell on for profit. They are running a small business sideline usually

They have caught people on ebay, who make a living selling on there but don't declare it as taxable income. If you are just selling the odd thing they wouldn't be after you.

HMRC says people selling off clothes or items that they originally bought at a higher price will not be liable for tax on that income.

Exactly. Selling off your old clothes, having a clear out or even selling a car which you have owned and driven is not "trading". Buying in bulk with the explicit intention of selling at a higher price is trading and you have always been expected to pay tax on your profit. Self employed people can earn up to £12,500 (ish) in profit before paying tax.

So HMRC are not interested in Wendy selling her kids' old clothes, or Brian flogging his old Astra. They are interested - as they always have been - in people who are running substantial mailorder businesses through sites like Ebay and not paying any tax on their income.

Of COURSE the Guardian are going to spin it into some campaign against the poor, people on benefits who are scraping by yadda yadda yadda. Because it suits their political agenda.

People run businesses selling through ebay so of course they should pay tax..
They won't be chasing people selling a couple of frocks and a pair of shoes

You can make up to £1000 a year and not have to declare it, after that you should be doing a tax return is my understanding

Although I don't think I know anyone who has ever done for a one-off thing like selling a car...

I imagine you'll get a tick box on Vinted etc to say 'this item was bought by me at a higher price than I am selling' or similar

Surely if you are a couple that is no different to having savings in the lowest earners savings account to get more interest allowance which is always recommended to do.

Did you just state you are going to performing tax evasion on your AirBnB income? I hope you don’t claim any benefits whatsoever.

HMRC are not interested in people selling their old bits and pieces. What they are interested in is people running businesses and not declaring them for tax purposes. If you earn over £1000 in this way you should already be declaring it via Self Assessment.

BTW HMRC does already receive info from eBay, Amazon and the like.

I have a side hustle and declare my earnings. It is not difficult. I would prefer that and coding in the tax to my PAYE than an investigation and possible penalties.

Maybe they are also looking at the usage of these platforms as fraud/ money laundering vehicles. I’ve seen a lot of things recently being sold without proper photos: ‘photo to follow’ only it never does, and it has still been sold. Also the empty bottles/ bags/ boxes ( not especially ‘collectible ‘) but still sold on the first appearance. And if these sellers are new accounts, as is often the case, the profits will be hard to trace.

The money being laundered is the profit from forced prostitution and drug sales. Surely even the Tory haters don’t want to enable these profits?

The government are suing Michelle Mone for 122 million and she's being investigated by the national crime agency.

@QuitMoaning I did, and I don't.

I have a side hustle and declare my earnings. It is not difficult. I would prefer that and coding in the tax to my PAYE than an investigation and possible penalties.

I have been self-employed for about 20 years and have several "hustles" which make up my income stream. I always declare every single penny because even though I am very small fry in the grand scheme of things, I really could do without HMRC coming knocking.

Agree it's not difficult. Tax returns are not scary and all you need to do is keep a note of what you are earning. There have always been dodgy people who want to earn money and not pay tax, whether it's trades doing a job for "cash" or market traders or people who work cash in hand and claim benefits at the same time. Times change and now online selling is an easy way to earn money on the black economy. I'm not surprised HMRC are taking an interest.

The uk has just started the same for platforms like eBay Amazon Etsy Uber eats deliveroo fiver basically any uk based that has sellers on it
The platform have to collect info on sellers on the platform on how much they have earned via selling on the platform and report this back to HMRC in Jan. 2025

it starts today - runs till Dec 24 and details are sent to HMRC in Jan 2025

if a seller won’t give their details which are address
NI number or tax ref
then the seller is blocked from using the platform till they hand it over and they can withhold any money that is owed

I've just done a test listing on eBay. I can't see that it's asking for my NI number, or a tax reference, anywhere? And Vinted too did someone say?

You are allowed to make £1000 in income from trading on these sites a year before you are liable for tax. Most people having an annual clear out are not going to qualify. HMRC don't care about mums selling on their kids old clothes, they want to clamp down on 'professional' sellers who don't declare income.

@wisteriatrees it won’t matter when they actually ask for the info they need as long as they have it from you before the end of December 2024.
They they have to report in Jan 2025