eBay UK VAT crackdown??

[fraenum]

I think you answered your own question, using stealth eventually the money has to go into a bank or savings account in your name. It would unwise to avoid paying tax as it would only cause more problems in the future.
If you submit an accurate tax return, declaring all income, HMRC will probably be satisfied and you will be left alone.
But if you don’t declare the income and HMRC do find out, then discover the stealth details/documents, not only will you be heavily fined but as you already mentioned you can find yourself in serious trouble with a ⊗⊗⊗⊗ passport.

Although to be honest you have the same probability of an average joe seller not declaring eBay income to HMRC just as much as a business seller.
I helped a friend set up Ebay/Paypal when their parents passed away, he gutted their house and sold the lot on Ebay. From the offset he got an account with 500/£10,000 limits and within 9 months had made around £30k and I know for a fact he didn’t declare this as extra income to HMRC.
Will he get away with it? Probably as he already stopped selling 18 months ago.
If he continued to do this over a few years would he get away with it? Maybe, maybe not. It would depend on what relationship his bank, Paypal or Ebay have with HMRC.

I would also imagine there are other kettles of fish such as people receiving benefits, selling on Ebay and not declaring it.
There are also many reasons why people turn to stealth.

[rsot]

Interesting thread regarding the UK VAT

[wired]

Originally Posted by fraenum

I think you answered your own question, using stealth eventually the money has to go into a bank or savings account in your name. It would unwise to avoid paying tax as it would only cause more problems in the future.
If you submit an accurate tax return, declaring all income, HMRC will probably be satisfied and you will be left alone.
But if you don’t declare the income and HMRC do find out, then discover the stealth details/documents, not only will you be heavily fined but as you already mentioned you can find yourself in serious trouble with a ⊗⊗⊗⊗ passport.

Although to be honest you have the same probability of an average joe seller not declaring eBay income to HMRC just as much as a business seller.
I helped a friend set up Ebay/Paypal when their parents passed away, he gutted their house and sold the lot on Ebay. From the offset he got an account with 500/£10,000 limits and within 9 months had made around £30k and I know for a fact he didn’t declare this as extra income to HMRC.
Will he get away with it? Probably as he already stopped selling 18 months ago.
If he continued to do this over a few years would he get away with it? Maybe, maybe not. It would depend on what relationship his bank, Paypal or Ebay have with HMRC.

I would also imagine there are other kettles of fish such as people receiving benefits, selling on Ebay and not declaring it.
There are also many reasons why people turn to stealth.

Yes some good points.

I think the 'longer' an account stays open then the risk level is raised, but yes if you do submit all returns, then its more likely you will be left alone - HOWEVER, once you are 'known' to the HMRC, they can request a compliance check at ANY time, and thats whats happened to a previous forum member.

Currently eBay and PayPal only supply information to the HMRC under court order, which they did a few years back when the HMRC did a sweep of large scale business sellers.

The one thing on ones side is that the HRMC is MASSIVELY under resourced, and generally go after tip offs and easily targeted/proved, but thats not to say they wont tap into the rest eventually..

30k in 12 months isnt a huge amount, I think as long as you are below VAT threshold in actual withdrawals, the banks would be less interested if you have a long term relationship with them.

Its all speculation though isn't it?

[blobby]

Originally Posted by SpaceZ

I have looked in to this. You are wrong.

No I am not wrong.

If you are buying and selling on ebay to make a profit AND you already have as you have said a full time job elsewhere, then you need to both declare yourself as self employed also AND pay tax on your TOTAL income, since you are likely to have consumed all your personal allowance up.

It really is that simple. Most of us pay tax, but you will always get certain types who wish to dodge them and break the law. If they are 'stealthers' they are also the types who normally want to know about the possibility of being able to be '100% anomynous' and who think it is legal to commit the criminal acts of fraud, misrepresentation and identity theft......Oh wait!

[537465616c7468]

Originally Posted by SpaceZ

Thank you for your response.

The question is, what if you are not a Sole Trader, and predominately use eBay to buy, occasionally selling things for profit, without being registered as a business seller? It is really astonishing that I still have to report this to HMRC even though I am working full time on the side.

with or without the job , you should be reporting it.

Astonishing or not, it is in fact the case.

Just ring your local tax office and ask them.

[SpaceZ]

Again, nope and nope.

If you are buying items to sell for profit, but only doing this on a regular bases with transactions resembling shops and real businesses, only then do you need to declare these to HMRC.

For God's sake, it does not mean anything and everything you sell for profit must be declared!

If you buy a pair of shoes on sale, decided not to use them and put them away for two months, and then later sold them for a much higher price, are you serious when you say I have to declare that? LOL

Here's a breakdown of what I use eBay for:

I sell things as a hobby and this month I sold two phones, a faulty Samsung S4 that's been sitting in the cupboard for a year, and a used Samsung S7 Edge. I don't sell every month, only when I feel like I have picked up a bargain and then flog it off on either Gumtree or eBay. I have found that eBay gives you a better price as people on Gumtree tend to phone and then come down only to haggle the price further!

Last month I didn't even sell anything but the month before that I sold our old washing machine, though I put it up for Cash on Collection.

Mainly I use my eBay account for buying but I have been banned in the past so this is why it was important for me to open a stealth account.

Please don't tell me I need to declare the two phones and washing machine I sold as that is just completely wrong and totally false information which is quite pathetic to be honest.

[SpaceZ]

Originally Posted by blobby

No I am not wrong.

If you are buying and selling on ebay to make a profit AND you already have as you have said a full time job elsewhere, then you need to both declare yourself as self employed also AND pay tax on your TOTAL income, since you are likely to have consumed all your personal allowance up.

It really is that simple. Most of us pay tax, but you will always get certain types who wish to dodge them and break the law. If they are 'stealthers' they are also the types who normally want to know about the possibility of being able to be '100% anomynous' and who think it is legal to commit the criminal acts of fraud, misrepresentation and identity theft......Oh wait!

This is just the most stupid information I have read this week. I am working full time on the payroll, why should I register as Self Employed just because of irregular, part time, hobby-like selling on eBay? Are you having a laugh?

Just because you use eBay as business and spend "24 hours a day" logged in here, reading posts and doing your so-called thing of "helping" other eBay business sellers, does not mean I am in the same boat. Keep paying your taxes, my friend. Good for you.

Some of us will just use our stealth accounts for buying and selling occasionally, here and there.

Go learn a thing or two before you start hitting that reply button.

[blobby]

Originally Posted by SpaceZ

I sell things as a hobby and this month I sold two phones, a faulty Samsung S4 that's been sitting in the cupboard for a year, and a used Samsung S7 Edge. I don't sell every month, only when I feel like I have picked up a bargain and then flog it off on either Gumtree or eBay. I have found that eBay gives you a better price as people on Gumtree tend to phone and then come down only to haggle the price further!

This means you should be paying tax.

You seem to have a problem understanding these basics.

Keep on being a tax dodger then......the LOWEST of the low.

[SpaceZ]

Your obscene and weak mind doesn't seem to understand that NOT EVERYTHING YOU SELL FOR PROFIT must be declared!

Keep being patriotic and pay your taxes, Mr "B-L-O-B-B-Y", lol

[blobby]

Originally Posted by SpaceZ

Your obscene and weak mind doesn't seem to understand that NOT EVERYTHING YOU SELL FOR PROFIT must be declared!

Keep being patriotic and pay your taxes, Mr "B-L-O-B-B-Y", lol

It does if you buy it with the intention of making a profit.

Keep telling yourself you are not a tax dodger and breaking the law.

You are though, no matter how much you keep denying it. Everyone on the forum with an ounce of intelligence can see it. You have even admitted it. Well played!.

[SpaceZ]

Who the hell are you to tell me I am not paying taxes? I work and pay taxes on my job, you idiot. I don't have any other job. What's so hard to understand about that?

Does making 50 quid on eBay sound like trade?, you waste man.

I don't "trade" on eBay in the technical sense. I am working and occasionally, say every couple of months, sell a thing or two.

So practically everyone who sells on Gumtree has to declare their sale? Keep dreaming, mr patriot.

[chimera]

**LOUD VOICES!**

HMRC:

"Selling goods or services

You could be classed as a trader if you sell goods or services. If you’re trading, you’re self-employed.

You’re likely to be trading if you:

sell regularly to make a profit
make items to sell for profit
sell online, at car boot sales or through classified adverts on a regular basis
earn commission from selling goods for other people
are paid for a service you provide

You’re probably not trading if you sell some unwanted items occasionally or you don’t plan to make a profit. You can’t use any losses you make as part of a hobby to reduce your tax bill."

Buying and selling for a profit, income should be declared.

Selling old washing machine you had knocking about, no one cares.

[SpaceZ]

You have misunderstood it completely if you think any level of buying and selling for profit has to be declared.

It's only if you sell regularly with the intention to make a profit, or are regularly buying and then selling those items order to make profits.

Where do you think traders gets their stock? They regularly buy of course. Then they sell.

They may be buying a few large boxes of items every few months, or a pallete once a year. It's all the same thing and is classed as trading.

Even if they buy in wholesale once a year, it's still trading since they are selling significant quantities of items from that single order from their supplier.

I use my eBay account to buy regularly but I actually keep the items I use, I don't sell them at all. These are usually cheap and low quality items that, if anything, would probably give me a loss had I planned to sell them. In fact, after using them, they would probably never sell at all.

The phones I sold were old and used. The S7 edge was used with tiny cracks (had dropped it) but is the only thing that made me a profit of £50. There is no way I am obliged to report that since it's an old item that I used for some time, have not purchased in multiple quantities, and had used it significantly (for around 10 months) before selling on.

So I repeat, buying regularly to sell for profit, or selling regularly in order to make profit are considered trade. At least 2 members of this thread have understood this wrong.

[fraenum]

I think there may have been some confusion in this thread. From looking at the forum most users seem to be business sellers, so you have been given advice based on being a business seller. This is where the difference between private and business sellers comes it to play.

Private seller - can buy a S7 edge (for example) use it and sell it on Ebay. Or can buy the same S7 edge and a year later it remains unused, sells it on Ebay to recover the cost. In both instances this would not need to be declared.

Business seller - buys the same S7 edge as above but buys it with the sole intention of selling it on to make a profit. This would need to be declared.

You do not need to pay tax on anything earned from private sales, if you sell off your own personal possessions.
You become a business seller when you sell items that you bought (or made) specifically to make a profit and should register with HMRC within 3 months of starting.

In addition a business seller can also have a private seller account on Ebay, only if they use this account to sell personal items.
All this said and done, there are still a lot of sellers on Ebay who are not declaring income.

[oompaloompa]

the OP was abroad, and was asking about VAT anyway...

Discussion was not relevant to the OP...there would not be consequences on the income side, as far as UK is concerned...

In terms of income, someone abroad or very small sellers do not bother to register...eg. a student who has no other income and sells 10k a years worth to pay for studies etc....if there would be no tax to pay, then I would not think there is a penalty

[jackpot2000]

Id you registered in different country you do not need to register for vat in Uk until your turnover reach up to Vat threshold in UK , after that you need to register in UK and pay vat here to

[Looking4Answers]

PLEAS HELP!!
Im lost, but would like to clarify the original post question, for myself.
BIG DIFFERENT BETWEEN PROFIT TAX & VAT.

We all pay TAX on our PROFIT, but if the TURNOVER goes past the VAT threshold £83k, is it illegal to create more companies and ebay accounts to spread the load?

For example, we have 1 ebay account, TURNOVER £160, per year.
From that is around £40k clear PROFIT, per year.
We pay our 20% Corporation tax on the £40k, which is around £8, going to the tax man.

BUT - if we now have to register with VAT, we would have to pay the Corporation Tax 20% on PROFITS £8, PLUS the 20% VAT on the TURNOVER (£32k).
Which basically makes the business not worth running.

PRODUCT PRICES CAN NOT BE INCREASED, AS WE WOULD NOT SELL ANYTHING, AND WE CANT SIMPLY PASS THIS VAT COST ON TO OUR RETAIL CUSTOMERS.

---------

So... PLEASE READ AND ANSWER:
is it legal to create 2 or 3 company's & an ebay account for each one, spreading the products across them... however all being registered to one LEGIT person or Company director?

As an example out of this, we would now run 2 companies, TURNING OVER around £80k on each company, paying the 20% Corporation Tax on the £20 PROFIT of each one, but avoiding the VAT 20%!

[opaqueninja]

Originally Posted by Looking4Answers

PLEAS HELP!!
Im lost, but would like to clarify the original post question, for myself.
BIG DIFFERENT BETWEEN PROFIT TAX & VAT.

We all pay TAX on our PROFIT, but if the TURNOVER goes past the VAT threshold £83k, is it illegal to create more companies and ebay accounts to spread the load?

For example, we have 1 ebay account, TURNOVER £160, per year.
From that is around £40k clear PROFIT, per year.
We pay our 20% Corporation tax on the £40k, which is around £8, going to the tax man.

BUT - if we now have to register with VAT, we would have to pay the Corporation Tax 20% on PROFITS £8, PLUS the 20% VAT on the TURNOVER (£32k).
Which basically makes the business not worth running.

PRODUCT PRICES CAN NOT BE INCREASED, AS WE WOULD NOT SELL ANYTHING, AND WE CANT SIMPLY PASS THIS VAT COST ON TO OUR RETAIL CUSTOMERS.

---------

So... PLEASE READ AND ANSWER:
is it legal to create 2 or 3 company's & an ebay account for each one, spreading the products across them... however all being registered to one LEGIT person or Company director?

As an example out of this, we would now run 2 companies, TURNING OVER around £80k on each company, paying the 20% Corporation Tax on the £20 PROFIT of each one, but avoiding the VAT 20%!

Speak to an accountant.

[bigboy]

Originally Posted by fraenum

I think there may have been some confusion in this thread. From looking at the forum most users seem to be business sellers, so you have been given advice based on being a business seller. This is where the difference between private and business sellers comes it to play.

Private seller - can buy a S7 edge (for example) use it and sell it on Ebay. Or can buy the same S7 edge and a year later it remains unused, sells it on Ebay to recover the cost. In both instances this would not need to be declared.

Business seller - buys the same S7 edge as above but buys it with the sole intention of selling it on to make a profit. This would need to be declared.

You do not need to pay tax on anything earned from private sales, if you sell off your own personal possessions.
You become a business seller when you sell items that you bought (or made) specifically to make a profit and should register with HMRC within 3 months of starting.

In addition a business seller can also have a private seller account on Ebay, only if they use this account to sell personal items.
All this said and done, there are still a lot of sellers on Ebay who are not declaring income.

what if the used s7 edge somehow made a profit? would this still be considered as a private sale.

[oompaloompa]

I doubt just 1 company owner can overcome that issue, you need advice....only thing is that you hear chartered accountants being duty-bound to report on you!

[Kiroshi]

I can answer this:

You CANNOT create multiple companies to avoid hitting the VAT threshold if it is an obvious avoidance tactic.

You CAN create 2 different companies and split the threshold IF there is a CRYSTAL CLEAR DIFFERENCE between the 2 compainies. Then you could in theroy do this.

For example: John smith creates 'Happy leisure ltd' which he has as an online retailer specialising in leisure wear. John smith also creates ''the organic honey co' whihc sells just honey. Clearly a difference here which in theroy would be viable.

You also need to be certain that you can put a total line between the 2 businesses. Different business bank accounts, bills, etc.

[colie72]

Each company is its own entity. If they are run seperately then each company can have its own VAT registration. It is NOT a person that is VAT registered....it is the business.

you can be running 2 businesses at the same time.....one business that makes 90k per year (that must register) and one that makes 50k per year (no need to register). you cannot combine the two amounts and declare you do not have to register for VAT. One business does, the other doesn't, even though owned by the same person. the TAX PROFIT from those businesses is different...because they apply to one person, who WILL be taxed one the combined profit.