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

[Branster]

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?

personally I think declare everything, that way you're covered...?

hey! spurred on by your posting I've just checked my Amazon account - started it last year and put a couple of links on my site and thought nothing of it - to my surprise i've got a whopping £2.21 on there!! Thank you customers - don't know who bought the best of the West Wing but thank you!

Another major source of income for the old forms...

My DH was very interested in this thread and practically pushed me off my chair to make a reply, he is an accountant and has had a pint of beer and half a bottle of red wine tonight!

"Firstly, lets make a difference between selling a few items lying around your house (Bought with taxed money no doubt) to actually carrying out a trade. If you are buying to specifically sell at a profit then you have a trade and the Inland Revenue will be interested in you, i.e complete a return. However, if no tax is actually due, then you are rarely fined, so some would argue why bother filling in a return at all. Personally I wouldnt worry about telling the revenue about what is a really small sum of money received from selling personal belongings , but if you trade and are making thousands definetly do.

In the 2004-2005 tax year you are allowed to earn £4745 before tax. So if your earnings are less than this you will not pay tax and my inclination would be not to bother with a return.

I have never heard of this £7900 number and cant really answer for that matter. What I do know is that any earnings over £4745 are taxable.

If your activities constitute a trade then you are also liable to class 2 Ni (£2 PW) and class 4 NI (8% of profit above £4745)

PUTTING MYTHS TO REST!
Selling your property i.e your pink Drerssing gown (As per ebay song!) does not qualify you to pay CGT (Cap Gains tax also known as property tax, property is i.e your house not your belongings)

No, ebay do not deduct income tax, neither do Amazon."

Demented's DH, £7900 comes from here (actually it was for 03/04, not 04/05).

If you earn less than the earnings threshold is it really OK not to declare? I earn bits and pieces which amount to less than £4000 but assume the people who pay me will be declaring that they have paid me, doesn't that mean the IR will be beetling after me?

Bran - does Paypal pay interest? If not, you don't have to declare it.
I think the CGT limit is £8100 now, so you are well under.
Basically, if you buy something for investment and then sell it, and your total for the tax yr is over this threshold, you have to declare it and pay at higghest rate of tax. this includes things like shares, paintings etc. However first you deduct the amount you paid for it, so if you buy something for £10 and sell it for £100, you write down the profit of £90 (there's also taper relief but lets not go into that.
At the end of the day, the amount you mention is nowhere near to the CGT threshold, and as long as it has nothing to do with your business, forget about it!!!

My DH again, he must have a sore head this afternoon !

"Aargghh! Can we all be clear that selling everyday stuff on Ebay is not Capital Gains Tax or CGT!!! Forget you ever heard the word!

Capital Gains Tax (CGT) applies to capital items like houses, assets, fine cars etc. Just because you lay out your "capital" there is no relationship to this tax "Capital Gains Tax".

Income tax is what you will be taxed under. Forget the £7900 limit, as stated before you can earn £4745 before paying INCOME tax. If you have a job already then the earnings from that job PLUS any substantial monies from ebay would be taxable.

Every person with an income other than a regular wage (On which PAYE is operated) should submit a tax return EVEN a person doing 1 hour a week childminding or Ironing as their only income.

HOWEVER, (And I never told you this!) The Inland revenue rarely fine people for not submitting a return when no tax was due i.e their earnigns were under £4745. This doesnt excuse your legal responsibility but makes life easier for you. There are millions of people in this bracket in Britain. So would a person doing i hours ironing a week fill out a tax return? - hardly likely.

Again, everyone at some point sells something they bought with already taxed money. If at profit AND IN THE COURSE OF REGULAR TRADING then fill out a tax return.

If you have a garage clearout and make £2000 well likely the stuff cost you more than that originally and so dont report the £2000, it's not taxable.

If you buy stuff with a view to selling it and you are doing this at a level consistant with a trade (Lets say £4000 PY) then yes fill in a return.

If I here CGT mentioned one more time i'll go mad!!"

To me the biggest question is what are you selling? I sell on the kids old clothes and books I have read and don't pay tax on this and don't believe it is due. On the otherhand I have plans of starting an e-Bay based business where I would source products wholesale and then sell on e-Bay for a profit, if this every gets off the ground then I will need to find a good accountant as in this case tax would be due!

Dear Demented's dh

Thank you for your last sentence: "If you buy stuff with a view to selling it and you are doing this at a level consistant with a trade (Lets say £4000 PY) then yes fill in a return."

That's very helpful - especially for sticking your neck out and giving a figure.

And if you send all your stuff to the Revenue by 30 Sept - so bit late here - they'll do your tax return for you

Tinker, I am getting deja vu here - I haven't checked, but I missed the Sept 30 deadline last year but they said then that if you file online the deadline doesn't apply - hope that is still true, I haven't found the papers yet! Doesn't Sept 30 come round soon every year!

Have checked - it still applies - phew!

Phew indeed

Cringe, I hope my DH isn't encouraging you all to have little businesses on the side ! Just goes to show you shouldn't let the men folk anywhere near Mumsnet, they get carried away!

Sorry Demented's dh, but at the risk of you going completely off your trolley, and as your comment earlier followed mine, and not wanting to seem a complete bozo, I have to say that...
When I mentioned items bought for investment, I was actually referring to things such as cars, paintings, jewellery, assets that appreciate in value etc. On these, CGT IS actually payable after doing the appropriate calculations and taking into account the threshold.
I just thought this point should be made as people DO sell such items on Ebay.
Of course, this doesn't have anything to do with most of us, but as I said - not wanting to appear a complete bozo...

bobs, no not at all and I think this is the whole question about this thread, what exactly is Branster selling on e-Bay??? Knowing this could swing things one way or the other. Are you there Branster?

Thank you all (& Mr Demeneted too, very kind of you to offer advice)for the very useful advice.

What I'm selling are in fact things I would otherwise throw away, give away or let dust settle on them and they mostly belong to me personaly unless DD's books and toys from when she was a baby and she's clearly not interested in anymore. So that makes things so much easier!

Also, I'm quite certain that all these sales would be under the threshold for paying tax (and knowing my luck, probably also these earnings together with my earnings as self-employed would be under the £4745, because I'm so successful at what I'm doing I hardly make anything in bussiness)

With that view, I won't bother mentioning the e-bay& amazon earnings on the form.

I'm only new to amazon marketplace & ebay and am amazad at how stuff sells! And I keep thinking at how much new stuff I've thrown away and can't believe I didn't think of selling it at the time. Very silly of me. Anyway, I'm really excited, it's only been a week and I think I made about £80 just by entering some details and going to the post offce a few times. Unbelievable! I know it's not much really, but I'd have thrown this money as it were. Top tip for anyone who's interested: skincare & fragrance sells extremely well on ebay. Boxed ofcourse, new. I was lucky to still have a few of those I never touched and got rid of some of them as they were presents and I'd have never used them anyway.. And I threw so many in the bin in the past...

Once again, thanks for all your help!

Well done, Branster - I'm more of a buyer than a seller (lego sells for a bomb!). It's fun isn't it?
Glad you're all sorted now and happy selling!

cheers bobs! have to say it's very tempting to buy but I've been strong so far. hope it'll last