to think that if you sell things for less than you bought them, then you aren't making £3000 a year

[cakeorwine]

I make thousands selling clothes as a side hustle on Vinted - the tax could ruin my holiday... but it won't put me off | Daily Mail Online

I see this loads - people who say they are making £1000s a year but in reality, they aren't looking at profit but turnover.

It seems this lady is buying clothes to wear and then selling them at bargain prices.

So yes, she is getting money back from her clothes that she is selling, but she has had to buy them in the first place to wear.

I also don't think she will have to pay tax - as she has not made a profit.

She could be better off not buying the clothes in the first place, but that's a separate discussion.

Well exactly

Will hmrc take into account initial cost? Does she have to prove it?

I suppose she is making money in the sense that she already has these clothes and instead of recycling or giving to charity, she’s selling them and getting money for them.

I don’t think she sees it as a business, she has a job.

It was a bit depressing is that she spends her weekends off work taking pictures in the clothes, listing them on Vinted, then taking several parcels to the post office to post.

She admits that she’s a hoarder, and I can relate, I hoard new clothes too and have started to see that it’s a problem.

If it helps her declutter and sort her hoarding issue whilst making a but of money, good on her.

I also sell on eBay so see some parallels.

They need to prove she is "tradjng with a view to profit" so yes taking costs into account (which means people who do hobby business can't claim losses on making Facebook tat against other income)

Many badges of trade so constantly buying second hand clothes which you mostly sell on, even if you briefly wear them may be a trade.

Selling on sone items years later js not.

When I bought a ps2 on launch day to sell on for profit -probably trading but under the limits for reporting.

As far as I understand, she would need to do a tax return as she has a turnover of more than £1000 from Vinted.

However, the tax return would need to look at the profit and that profit would be taxed.

I guess she might need receipts if HMRC were to investigate

I’ve got stuff from years ago without receipts but still with tags that I was going to sell. But the new rules put me off. Even though I need the cash.

That article makes no sense and in fact could contribute to people’s already woeful understanding of personal finance.

A “side hustle” (I hate that term) is something where you earn an income/profit. She is not doing that.

I mean she could simply buy less stuff, then there would be money for a holiday.

We have an etsy business. We have sold a few thousand pounds worth of products over the last few months. But only just started turning a profit due to start up costs plus running costs (materials, postage etc). However we track it all as it is a business. So at tax return time, we knew we will pay tax on the profit.

If she registers as a sole trader she can deduct costs, which would include purchase price so she would not pay tax. If she just declares it as income it will be classed as income, I don't know if she has to declare it as income if she's just selling her own stuff, but becoming a sole trader would solve the potential problem.

Yes

We get this at work. A misunderstanding of turnover versus profit. It's depressing. You can see this in other articles where people say "how much they've made" when it's really how much they've turned over.

The rules aren't new.

But she likely sees the cost of buying the clothes as a sunk cost. It doesn’t mean she doesn’t understand that she’s not making full profit.

I thibk the £1000 turnover is just a prompt to consider if you are trading svd need to do a tax return.

But selling £1000 worth of your own stuff does not need a tax return as it's not trading. )it doesn't need to be used, just you bought it to use not sell -ie your intention at the time of purchase)

Selling £1000 worth of stuff you bought to sell on is trading -no tax May be due, once you deduct costs, but you are trading then and strictly a tax return is due and tell hmrc you are trading.

But reported by the platforms is new, it's only been in for a few days

@Rummikub

look at the actual legislation, not 'articles' like this nonsense which isn't worth hanging in the outside lavvy!

@cakeorwine

sone days there's simply not enough gin!!

I guess with baby clothes there are a lot of free clothes given away, so if someone was selling bundles of them then they would be making a profit.

the thing is not about selling your own stuff but buying to sell at a profit.

if you have 28 t shirts that are brand new with tags in 4 different sizes all the same pattern no-one is genuinely going to believe you bought 28 near identical t shirts to wear yourself.. you bought to sell on therefore it is trading
if registered as a sole trader and you sell these t shirts at £20 with free postage
your profit is £20- ( price you paid for t shirt) - ( ebay/ vinted fees if applicable) - postage costs - packing costs) so your profits may only be £5 and you need to keep the evidence of these costs. here turnover is £560 (20x28) but profit is £140 (5 x 28)
however if you sell 28 items of clothing all different mostly used but with a few brand new it looks like you are selling your own stuff and no tax or tax return is due. Unless you are selling very expensive items like jewellery or fine art for thousands in which case you may owe capital gains tax

someone selling their own kids clothes as they out grow them fine but someone selling hundreds of these a year is not just selling their own kids clothes

That isn't the point. If you spend £250 on baby clothes and sell them after use by the baby for £100, you haven't made a profit, you've just reclaimed some money back from your original outlay. Worth hanging onto receipts but with online accounts etc that is easier to do.

A lot of these people are getting the clothes free, at car boot sales or market place etc for much less and then selling on Vinted for more than then bought so some are making profit

HMRC are not going to care about accounts like this that have a low turnover. It's the people who are obviously trading on these sites that they'll go after.

But the point is

It does not matter if you make a profit if you are not trading.

Selling a few items for more than it cost you is probably swamped by the other things you sell on for less than cost.

It only matters if you are buying all these items with a view to selling on for profit.

I sell off my old console games -sone would be at a profit bit overall they are not and I am not buying g to sell on, I have played them.

30 items a year or £1700 are the trigger figures for reporting.

Then what happens?

@JingleSnowmanTree tbh I haven’t read the linked article but following in news

@Rummikub. It’s whatever is most
so either 30 items
or 2000 euros
if you sold 29 items at 50 each you wouldn’t be a reportable seller as it’s only 1450

if you sold 29 items at 100 each you would be a reportable seller as it’s over 2000 euros