HMRC Is After Your Sales Money

[crafters_corner]

Please be patient with me: I am an old lady and know nothing about tax, not having to pay any.

Does the 30 mentioned mean listing that number at any one time? And where does the £1,000 apply - each item? per month?

Sorry to be so obtuse

[mark4740]

This is what the other site posted about this
2 screenshots not in order but i don't know how to edit them.

[Stnenopmoc]

Something wrong there somewhere. Reporded to HMRC in January each calender year, but taxable in a tax year which is April of each year. Seems like hard work aligning those two.

[crafters_corner]

Thank you Mark 4740. That makes it clearer.
Moving to a bungalow later in the year and no way will all our possessions sell for under those limits. OH has hundreds of maps and books and I have hundreds of new crafting items which were purchased but never used.

[20sent06]

This is what the other site posted about this
2 screenshots not in order but i don't know how to edit them.

What they don't mention is tax will be calculated on the gross amount paid by the buyer ... so, for example, a £10 item with postage will net you a mere £5.05!! ... tax of £2, postage of £1.25 and fees of £1.70 !!

[goldenwonders]

What they don't mention is tax will be calculated on the gross amount paid by the buyer ... so, for example, a £10 item with postage will net you a mere £5.05!! ... tax of £2, postage of £1.25 and fees of £1.70 !!

Don't think that is correct. If you are trading as a business - self employed, you are allowed to claim legitimate expenses against sales. Postage (plus packing and any sundry items, possibly printed labels, leaflets that are included etc) is taken out of the sale price, the original cost of the goods and fees incurred by the site you are selling on is also a legitimate expense. Tax is only paid on 'profits'.
e.g.:
£10 sale inc of postage - less postage £1.25, less fees £1.70, less cost of goods, say £2, less 50p - sundry expenses packing/print/paper/ etc = £5.45, so you would be taxed on the £4.55 profit. Paying HMRC possibly 91p.

If you are not trading eg: selling your own items and NOT purchasing or making items specifically to sell on then you are not liable to tax on these goods. You are liable for tax after you have exceeded your capital gain allowance which is currently £6,000 - that now being reduced to £3,000 in April.
e.g.
You have a classic stereo system, speakers and record deck purchased in the 90's for £5,000 - you sell for £7,500 - profit £2,500. You are not liable for tax as it has not exceeded the £6,000 capital gain.

However as I say the real way to protect yourself is to keep a record of sales and expenses.

[theElench]

Even though I'm down sizing and selling stuff I've mostly had for many years, so I consider that I'm selling personal possessions that should not be taxable, I will be doing as you say and keeping records of every sale I make. According to HMRC, (as I understand it) they are looking for businesses and traders who are not declaring income that should be taxable. But where will that stop?

I think there is a fine line between looking for obvious businesses not paying tax and trying to squeeze tax out of anyone who can't prove they're not a business. HMRC does have a reputation for being heavy-handed on occasion.

I can't prove how long I've owned 99% of my possessions or what I paid for them when I bought them. About the best I can do is keep records of all sales my this year.

For anyone who doesn't know how to do this, I'll be doing the following which isn't difficult or time consuming.

I already keep my RM "Proof of Posting" which shows the item's identity and postage cost, in case of lost / damaged parcels. I'll be adding on the back of the slip any expenses such as Listing Fees, Paypal fees, cost of packaging, etc.

How HMRC or I can put a figure on the what I paid for the item years ago, I have no idea. Hopefully it won't come that, but as someone noted earlier, HMRC is going after the easy targets while doing very little about massive tax under-payments by corporations who have legal depts. ready to fight back.

[goldenwonders]

Like you my attics are brimming, as you get older, you get more and more and sadly inherit more on top. We've taken 4 bags of clothes to charity shop this morning.
It's always wise to keep a record, you shouldn't have to in my opinion - unless its masses of sales. However my accountant of 30+ years has always said HMRC only take note when someone says they have nothing to show them. That's bad news because they have the right to assess - and you would have no defence, because no record was kept. Fines result and like the P.O. - you have little right of appeal!

A simple little book with a column for each of the following - transaction number, date, brief item desc, cost to you, sale price, postage, fees. You can claim all expenses that are associate with the sale. Technically if you catch the bus to the post office - ticket fare is a legitimate expense - regardless of if you happen to do your shopping at the same time LOL!

The taxman is only really after the traders, those who obviously buy and sell, especially new items, however if he sees a chance to grab a few bob - he will!

I always remember a printer friend of mine who gave all his scrap printing plates to the staff towards their Christmas party. Tax man said because the money went through him, he was liable for tax on the payment from the scrap man - they then fined him an equal amount for non payment - cost him nearly a grand! He was not well pleased.

Most people need not worry - they should just get on with it, enjoy their hobby!