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Original poster

Do earnings from Ebay and Amazon sales have to be declared on the Tax Return form???

44 replies

Branster · 01/10/2004 21:33

DH says no.

I'm inclined to say yes but couldn't explain exactly why.

Do any of you know the legal stand on this or indeed have decalred such earnings in the past?

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JanH · 01/10/2004 21:36

Hm - I see what you mean, Branster! But they would come under Capital Gains Tax, wouldn't they? Like houses or whatever? And there is a pretty hefty allowance before you have to pay tax on those?

JanH · 01/10/2004 21:37

Inland Revenue CGT page

SoupDragon · 01/10/2004 21:39

I think it's yes and I have a vague feeling that I read this on ebay itself, although I may simply be imagining this...!!

JanH · 01/10/2004 21:39

Annual exempt amount was £7900 for last year (04-05)

JanH · 01/10/2004 21:39

Oh, yes, so you do declare it but unless you have made a huge amount you don't pay any tax on it?

Original poster
Branster · 01/10/2004 21:40

So they are considered to be your own property that you sell, which they are. Am I understanding this correctly?
Do I still need to bother mentioning them on the form then even if they add up to bellow the allowance? Which they would be as we're probably talking about an estimated £200-£800/year maybe.

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PicadillyCircus · 01/10/2004 21:40

Would depend on whether it was a business - I am an accountant so know vaguely although have consumed an amount of alcolhol tonight so may be a bit bad at typing.

if it were a business you would need to pay under class D1

Are you doing a lot of trade and making a profit?

PicadillyCircus · 01/10/2004 21:42

D1 is different from CGT by the way - I'd say the amount you're talking about prob wouldn't be important

Original poster
Branster · 01/10/2004 21:43

So then, you do declare it (say it's bellow the £7900 you just don't pay tax on it). But if they want to see details of the transactions (which the tax people are entitled to ask for presumably) what would you produce?
Should I keep a record of all these e-mails and Paypal invoices etc (have only opened a paypal account so i can keep track of it for now but I assume you don't get hard copies of these transactions, unless you print them off yourself)

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Skate · 01/10/2004 21:45

I'm sure DH told me it was sort of paid through e-bay. Hmmm, will go and ask him now. Not getting any bloody work done anyway - too boring!

Original poster
Branster · 01/10/2004 21:48

well, i'm registered as a self-emloyed (creative industry so no sales of products as such on that side)
but on the tax return form i would probably come accross something asking me to declare other income.
what i make from ebay is not all that much estimated yearly (come to think of that what i make as self employed is not much either )
so, what should i do? declare ebay earnings , keep all records of transactions or not mention any of it? i don't want to do anything ilegal that's why I'm asking.

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roisin · 01/10/2004 21:50

Dh's accountant said he would have to declare it, and would have to pay tax on the whole lot (not CGT), as it (buying and selling of books) had become 'more than a hobby'. However, when he contacted the IR direct with a query, they informed him it didn't need to be declared when he told them the figures involved, (which I unhelpfully do not know. I expect somewhere between £400 and £1000 pa.) The definitions on these things are fairly vague.

I would say definitely yes, keep good records of everything.

PicadillyCircus · 01/10/2004 21:53

I'd say to keep records of everything. There was once a case to decide whether something was a hobby (which you wou;dn#'t need to declare) or a trade and there was a person selling lots of toilet rolls.

It was decided this wasn't a hobby.....

Original poster
Branster · 01/10/2004 21:54

right, so keep recors of everything.
perhaps i should phone IR when i fill in the form and ask them whethr to add ebay type of earnings on as well.
it would be good if they cam under CGT and I wouldn't have to pay tax as it would be such a small amount. it's such a hassle to work out the tax as it is and keep away from spending it. i'm really diying all this accountancy things too so i get confused sometimes. at least if i made a decent earning overall it would be worth it more...

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Original poster
Branster · 01/10/2004 21:54

lol PC

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Original poster
Branster · 01/10/2004 21:56

How come you are all so well informed and inteligent??!! I'm so glad I found MN, everyone here is so helpful ... thank you

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PicadillyCircus · 01/10/2004 21:59

As I said I am an accountant in my other life....when sober I am better informed as well! If you want to CAT me then do but I'd say you should be all right; although keeping records is always a good idea

Skate · 01/10/2004 22:00

I'm sure you don't have to - I mean, if you sold your old buggy to someone for £20 through the local paper, you wouldn't declare it would you?

PicadillyCircus · 01/10/2004 22:04

It does depend how much you do though.....silly tax rules

Original poster
Branster · 01/10/2004 22:06

skate - that's the problem, I wouldn't know whetheh to declare that either. i want to know how it all stands and what other people are doing because as a self employed (a poor one for that matter from own earnings) i have to fill in those stupid papers once a year and since i've been doing that i watched other earnings just in case i need to declare them, but i never earned anything else on the side until i started this ebay & amazon trading last week. so then i started wondering...

PC thank you for your very kind offer. nearer the time if the tax man isn't very helpful on the phone (he usually is, probably because he feels sorry for how many papers i fill in on such small income ) then i'll take the liberty to ask you more questions if i may.

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24HrsNotEnough · 01/10/2004 22:07

Branster - I've only discovered MN in the past week and already found it to be hugely informative, supportive and very entertaining...I am totally impressed by the site.

However, am even more impressed that you're doing your Self Assessment so early, and on a Friday too!

I'm also self-employed and half of these bloody Inland Revenue forms seem to be written in a different language to mine! How many times do you read, and re-read and say WTF ???????

Original poster
Branster · 01/10/2004 22:14

24HrsNotEnough - oh no, I'm not doing them now or in the very near future, but i do worry about them. stupid things, aren't they?! i can read them 50 times and still not understand more than if i didn't read them at all.
glad i'm not the only one

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Original poster
Branster · 01/10/2004 22:17

and i did them for 2 years whilst my earning where nil (this is actually true, not even 1 pence!), so you'd think it's easy to just fill in all the boxex with 0s. Not a chance. Took me a week to understand which boxex i'm supposed to fill in and which to leave blank.

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Original poster
Branster · 01/10/2004 22:30

one last question.
on the same tax form, would i have to declare having a Pypal account?

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24HrsNotEnough · 01/10/2004 22:38

i know exactly what you mean!!!

just had a nightmare with the Tax Credits forms - usually do them online but they've changed the system and now you need to register and have passwords etc. (before just logged on and did it). So, had to do a paper one...aaaaaaaargh. But everyone's asking me why the problem - it's the same information you're putting in....yes, but the computer moves around and does the thinking for you!

"...if you haven't got a lot of money fill in box 1, unless you once got some money from somewhere you never even thought twice about but in fact it counts as income so you must tell us about it, in which case fill in box 1.3. Then move on to page 1349."