Is The Tax Man Coming For YOU? Side Hustle Tax | DON'T Get Caught Out! 

Truth is this country is unfortunately the best in the stinking world ,we have no place to run

Its very hard! I've always said that reselling isn't a get rich quick scheme.

@@user-cv1en2qt7x it's all about turnover not profit.

It's a pathetic money grabbing country that only looks after the rich

​@@user-cv1en2qt7x but if your regularly selling lots online not just on the odd occasion but on a regular basis then they are going to question you more right?

@@user-cv1en2qt7x Wrong! It's INCOME tax, not PROFIT tax

FACTS!

this is the way I see it. a lot of it will be automated. they will set it so the there computer systems target the bigger sellers that are not registered as businesses. these sellers will be sent an automated email or letter saying there account has been flagged and its up to them to register in the next 3 months or they will be investigated. I bit like the tv license scare mongering letters. The dedicated team wont even know a letter has been sent until there system deems it worth there while.

The team will work with the cases that have been selected by a computer. The computer will do most of the work cross-referencing and flagging people.

I thought the same thing 25 is nowhere near enough, they'll have to obviously prioritise on top of that so even if you're turning 10k a year you probably won't be significantly enough. Personally I dont think eBay is a good way to make money anyway

Or people just aren't buying unnecessary stuff as much? Just to thought.

I have heard they make in person visits to boot sales too, sometimes maybe random but also from tip offs.

Bang on the mark there , not enough choice people will look else where , human nature .

Interesting perspective 🤩 On the flip side if other platforms struggle to gain the sellers to meet demand it could have the opposite effect and increase eBay’s already big following… Time will only tell I guess 🤷‍♂️

If I had something to sell and it wasn't worth the time to list it there is only one place it's going , the bin or bonefire.

This is NOT new. People have always been required to report their income and profits on trading activities that MAY lead to a tax charge. All that is happening now is that eBay, Vinted etc need must flag those potential traders to HMRC and HMRC will check whether you are trading or not. If you sell a few unwanted item from a home clear-out then you will not have a problem even if it is over £1,000

It's going to hurt them but let's face it Ebay turned a blind eye to all this going on and let people break the law by not acting when they should have (for years and years and years). How many private sellers (I mean businesses ie 500 items all new) were not giving consumers their rights and also didn't pay any tax on it. There is nothing stopping people to still sell on eBay they will just have to do it the right and fair way now.

totally agree... these c@nts are only "dedicated" to go after the working classes, trying to create some extra income to compensate for increased energy/food/petrol costs. These people are truly evil. God will judge them.

100%...they will NEVER go after the Branson and Bezos types.

​@@Helloelliot-k2c It's when they report your income to HMRC. This doesn't mean you're being flagged though.

@@Helloelliot-k2c technically yes you could do that to fly under the radar but if people started doing things like that, they would change the levels at which platforms need to declare your income to 1 item and £1 if not 1p. They could do that without warning. If you got found out for doing such a thing it would be classed as illegal tax evasion. Which in extreme cases can be 7 years in prison. So really isn't worth doing. Even if you got away with it for 10 years. They can still backdate tax bills. It's not worth the risk in my book.

I agree, £1000 turnover for selling on ebay etc is really not that great, £1000+ profit would be (in my case) a lot harder to achieve, more like £1000 loss.

That's why they've started this campaign to scare people in to coming forward. They simply can't cope. Imagine the amount of tiny side hustles that go over the 1k limit that don't declare. It's simply not cost effective for the HMRC to go after them. The less you make, the further you are down the list for the HMRC to bother coming after you.

All the processing is done electronically so no real worry for them.

Artificial intelligence is coming for everyone

They have the infrastructure , don't worry . Gonna be a lot of nervous people ......

They did say they’d hired 24 extra staff 😂

To counter that though, if you register for self assessment most of them expenses become tax deductible on your tax return.

I get that mate but it’s just the whole rip off Britain that gets me boiling 🥵 You put the time and effort in for yourself only to be ripped by parliament

Ebay have been reporting to HMRC for ages as well its only been pushed wider now to other platforms

Just put a separate folder in your mail for postage receipts if paid on line and a box for paper receipts if paid at the post office. 😊

@gisellematurano259 it doesn't matter to me as I use Quickbooks and Drop and Go but for everyday ppl using Ebay it's a nightmare to keep track of postage receipts for 2 years

If everyone protests to not pay tax then we're all good. Lol😊

I agree, it does put me off actually buying anything (such as books), if I now have problems selling them on. Perhaps I should just use the library more

Still taxable ...

Boot sales are also on HMRC hit list because of the market stall type sellers

@@webpigjohn4959 take cash ?

Hoping so!!

Cash is king and easy to hide @@atters2

Appreciate that!! :)

@@RetroReselling i appreciate you being sensible, not panicking people and basically saying it is better to do it than not. I sent you a insta message as I would just like to know what level of quick books you are using?

@@RetroReselling could I also ask what version of quickbooks you use ,although I am nowhere near the same level as yourself , it started as a clear out of years of junk and now I’ve picked the odd item up to resell online .

What version do you use please

@@stuartmather5591I am using self employed which is the lowest version was advised to move to essential but I don’t know that the difference is

They are making it more difficult for people to evade tax. The rules on tax remain unchanged. Bear in mind this isn't VAT this is income tax. VAT registration is required at £85k turnover and is in addition to income tax. No one who has been correctly reporting should have to raise their prices. Personal items that maybe sold at a carboot aren't being taxed anyway so you can still use these sites as you did before. no traders are going to switch to carboots

They are making it harder to dodge tax if you are a dodgy seller. In reality, it is a good thing as that tax goes to NHS, police, schools etc. If you are selling your own stuff it still does not affect you. This should only affect people acting outside the law.

How do they know the difference. You could be selling household items off and another seller could be buying and selling household items from charity shops. They look exactly the same. Also £1000 is about the cost of a PlayStation 5 and mountain bike. Every 18 year old is gonna be classed as self employed. The government is a disgrace!

@@north584 They say it will go off patterns of selling. Constant selling daily is going to look like a business. 2 items in a month selling their PS5 and mountain bike won't look like a business.

@@north584 It will be obvious for some sellers. ie 10 new Nike trainers and multiple other listings, 1000+ items listed on ebay 95% being new. And just the quantity of items. I went to buy a controller off ebay. he has a lot of new all the same yet items selling as a private individual. For the person that just dabbles a bit in buying at boot sales and selling it won't be a problem but there are obvious sellers that would have a problem trying how to explain their situation.

Nice work!! It sucks to pay but it just means you're earning well to be in that bracket in the first place 😊👍🏻

It's only a bitch if you only just trip into the 40% level as overnight you can be bringing home significantly less than last month. Buy hey ho it is what it is I guess

Sorry if this is a silly question, however I am new to reselling, I've already declared as a sole trader but need some advise on invoices and receipts. If for example I buy from a carboot or a private seller on Facebook market and go to their place to buy and they don't want to give any personal details ie an address, name etc then how do I prove to the tax man where I got my stock from? What happens if they don't want to provide a receipt what do I do ?

Selfish satisfaction that everyone else has to file as well.Your mother should’ve swallowed you.share someone’s burden of cancer.piece of shite!

I'm not qualified like I said so can't give advice but I believe the £6k figure is about capital gains but some things are exempt

That smirk should tell you all you need to know about this bloke ...

He’s happy to buy cheap from people who aren’t paying taxes at car boots so he can sell for higher. but then goes on the moral high ground that he pays taxes on eBay, slightly hypocritical

I feel so sorry for you, this is going to crush many gig workers just to to survive the cost of living crisis

You have an account, your wife, kids, family members? Do what you have to do to provide for you and your family. Don't be scared off by these scare tactic headlines.

Don't blame me for this, I'm just clearing up confusion going around. Why would you stop making extra money for your family? You only pay tax on your profits over the £12k figure so not being able to afford it doesn't make sense. Yes I said on a selfish level it's good for me as it'll remove a lot of non reporting competition?

It's a tax on profits, so net sales excluding not just eBay commission and P&P charges but also fuel costs for travel to source goods and office costs for processing orders. The tax officers can be really helpful in guiding what you are entitled to as a new reseller.

@@judithpride1690 And what about other costs? Supplies, equipment, etc.?

@@CJ0175 Have a chat with your tax office, they'll be able to look at your specific case and give the most accurate, up-to-date information. I'm not a tax officer or financial professional.

Most people seem to think this is a totally new tax. Which isn't the case at all. It's slightly concerning though just the amount of people who seemingly had no idea about the rules prior to all this coming out..

Good question. Same as - how do they know if im selling cardigan from charity shop what I bought for making profit or just getting rid of mine and my families stuff?

​@@dianavaitaite5629 they don't, thats why i thought i had read it was on ALL people selling even if you were selling your own personal stuff. I could be wrong but thats what i read. You would need to keep the receipt for that cardigan otherwise when you bought it in say New Look, just in case you decided to sell it 2 years later

Is there guide as to what allowances of cost used when working from home as a side hustle ?

@@IfItAintBrokeStillFixIt The gov.uk website gives you a list or if there's something you're not sure about just Google something like "can I claim . . .on my taxes uk" and you'll get accounting websites that come up with general advice.

It's always makes me laugh when people comment things sort of thing because it should be common knowledge there's things like fees, postage etc to take away. It would be a long boring video to break down every single sale every single time 🥱

From what I gather, even if this is your main income, you would still have to declare anything above £1000 (that's turnover, even if it wasn't profitable), even if you believe it works out as lower than your non-taxable personal allowance. Always better to be safe than sorry as like is said in the video, ignorance is not an effective defence. Also to add, you usually will have to have registered by October 2024 for any earnings between April 2023 and March 2024. That usually means you should have registered in October 2023 for earnings between April 2022 and March 2023. I think if you have registered already, it rolls on year on year and I don't think you keep registering.

I wouldn't sell them, well not online from now on unless you know of a private collector who will pay a reasonable price in cash.(Important in cash, not a bank transfer) Of course if you don't mind getting shafted by the taxman it's best to just keep them. Another thought comes to mind is anything worth buying on ebay anymore ? Everyday items for use yes but not collectables. The problem is how can you sell the things you bought some time ago for their true price today, on ebay you can but after tax. Or to an interested collector who is genuinely interested in your item ? I go for the latter 100%

I think in your case you would be liable for Capital Gains Tax.

At any point if you bought items to sell for a profit and it exceeds £1000 within a financial year then you should be declaring it

The tax year is April 6th through to April 5 the following year

You have to put money aside for tax or risk a fine plus interest on top.

You can still do reselling as a side hustle, just after £1000 turnover you have to declare yourself as self employed and fill out a tax return every year. You only pay tax on PROFIT not turnover and even then you have other expenses you can take away like fuel, fees, equipment, postage etc etc

And tax is only payable after earning £12,570 profit in a financial year (April to April)

If you are cash basis, you would expense the full £50 in the tax year you purchased them.

I use basic cash accounting so the £50 would be an expense for that tax year

Not sure about the airbnb figure but you can sell your kids old clothes without worrying at all about the £1000 figure as you didnt buy them to sell for a profit :)

Not my accountant but I meant they're going to be looking back at the previous 2 years of online sales

Most probably 🤣

Just have a record to prove to the HMRC that you are doing the best you possible can in an environment where a vender receipt is not available, for years I keep a purchase note book recording date and place of car boot sale, money taken/ returned with to show spending. Brief list recording items purchased. I take a photo of grouped items too, but that may be overkill on my part. It’s not perfect and exactly what they want, but if you speak to them they generally say it’s better than nothing.

@@VGM-UK I agree with your comments. It's all about showing HMRC that you have taken reasonable action to keep your financial records as accurately as possible. However, I think HMRC are banking on the vast majority being too lazy to keep records..............

I make a record on quikbooks of the amount I spent, day, location etc & take a picture of the haul

Your own stuff is fine but unsure if you're gifted things to sell

from 1st Jan the platforms are required to share data that can go back up to 2 years

Martin Lewis website says - "From the first of January, they started collecting data and they will have to share that by January next year which means they are SHARING DATA FOR THE CALANDER YEAR 2024"@@RetroReselling

Also "Digital platforms “will be reporting annually for calendar years [rather than tax years], so the first period of reporting will be the year ended 31 December 2024, which they need to report by 31 January 2025

As an avid game / toy collector , I am sure you have plenty of pictures of your collection built over time. That should be plenty of proof to prove it is a personal collection and you are not a reseller.

I disagree in fact if you don’t have receipts this may prove even more that you are not a business as a business seller would generally keep their purchase receipts as a private buyer would not. I would wait to see if HMRC contact you and if they do just explain the situation. I think HMRC are going to get into a lot of problems accusing people of selling as a business when they are actually selling theirs and theirs family’s old items. I think they will only be able to prove business sellers if there are selling an extremely high yearly amount 20k +, or they are selling multiples of the same new items. HMRC are going to have issues with this they may try to bully people but if you stand your ground there is not much they can do and it will not be worth them proceeding.

Yes you're absolutely fine as it's your collection that you didn't have intention of making profit on. I believe there is a number of £6k a year on certain things like this before capital gains tax might apply but talk to a qualified accountant if unsure

This isn't correct Matthew, be careful if giving tax advice if not qualified because you could be spreading misinformation. You don't pay tax after £1000 if you've not hit the personal threshold and you don't have to keep receipts of everything in life if it's just yours

yes central bank digital currency like charie said you will own nothing and this is another way of you stopping earning a couple of quid people on ebay are now on thin ground

Why stop?

You can? Postage and packaging is a legitimate business and expense!

If they're your personal books, DVDs etc then you don't have to declare. If you're buying and selling them to make a profit then yes you do have to declare the income and fill out a tax return which will include your deductions such as postage, cost of goods etc

I believe this does apply to private and business sellers 🤷‍♂️

@@laurenceknight3293 I was replying to George's comment about competition from other resellers who don't pay tax leaving eBay which would be good news for us legitimate businesses. But the huge issue we have is businesses who DO pay tax selling vast amounts of products on multiple private accounts therefore avoiding distance selling laws and gaining all the benefits which a private seller gets from eBay as opposed to having a business account.

ebay report earnings to HMRC who will then chase it up with you.

No need for a business account now if they're doing this, private account is the smart way, as long as your paying tax who cares

on your profits, you probably wont make a profit on your old stuff

true but i dont get how they would determine it yknow @@theboytheycallkenny

You don't ...

If it is your personal belongings there is no tax to pay unless it is a high value item over £6000

@samanthacady4171 that's for capital gains tax so not really related.

Wow you must be doing some turnover, are you self employed or a limited company?

@@swiftythrifter6387 self employed 👍🏼

How much do you make a year for them to take 6k!

@@oiiReAPeRzguessing over 40k

Thank you :) Yes its painful when that bill comes round but I can sleep easy at night knowing Im contributing & not getting a knock at the door from the tax man! lol

You will be fine then, its only if you buy items with the intention to sell them at a profit. you can buy an item use it for a while and then sell it, its for people who are buying to sell for a profit and that is not what you are saying. if you have 4k of toys you have had over the years and are after clearing them out then this does not apply to you.

They're your personal collection that wasn't bought for the intention of making a profit so you're all good 😊

@@RetroReselling thank for clearing all this up once i saw the new about this it has put me in a panic mode over the last couple of days haha

Do you have receipts for all the original purchases? This is where a problem may arise. I could say exactly the same that I was selling my own collection when in fact I was sniping items from Facebook marketplace and selling them on eBay but I told everybody it was from my personal collection. If they come after people, original receipts are probably going to be key.

@@RetroReselling but then everyone could say that with second hand items.

ThTs all you can do, have a Cash book & write down purchases, Hmrc aren’t going to scrutinise you if you are declaring, it’s the ones not declaring they’re gunning for

Just keep contemporaneous records of expenditure. HMRC don't need receipts for everything just reliable records. If you are doing your best with your returns, HMRC are very unlikely to enquire into your affairs.

Thanks guys, just been the question on my mind. I have been self employed for a few years now. Previously working in construction so I know how to fill in tax assessments etc, but just with the new venture in reselling I wanted to be clear with some things. Appreciate the replies 🙌🏻

I use Quikbooks Self Employed and when I go to a boot sale I just make a note on the app the complete amount spent, where & when with a picture of the haul all together instead of item by item :)

Recently started using QuickBooks myself, still getting used to that too. Because when adding my bank it obviously looked back on about 600 transactions so I’m currently having to sort out what’s expenses and sales etc.. but it’s going good 👍🏻

Would be good to know what expenses a reseller can claim on the tax return for new resellers like myself

​@@novicereefer7767 also how do you prove how much you originally paid for the item

There's loads of info on the HMRC website and RU-vid channel. @@novicereefer7767

@@novicereefer7767guessing printers, laptop, desktops, mobile phone contract, ink cartridge, packing, etc

I get this a lot but as I'm not qualified I wouldn't feel comfortable doing it. Plus everything I'd fill out is personal information so the screen would be blurred for most the video anyway lol

eBay have VAT added to their fees which is normal and you have to pay tax over the personal allowance which is also normal. It's just that the online companies now HAVE to share details with hmrc

as a limited company you don’t have personal allowance, you would pay corp tax on profits no matter how little you turn over etc of course if you don’t make a profit then no take is due etc but would still need to file

Being a Ltd company is different to self employed as the personal allowance is for a person not a company so wouldn't apply. Check with a proper accountant

Does one still get the £12k allowance if you're full-time employed and register as a sole trader on the side? .. or has your full-time job used up that allowance regardless if you register as a sole trader? .. Would that mean any profit you make just gets added to your full-time income? .. Thanks@@RetroReselling

Very true yep, people who sell their old things don't need to worry one bit. the only people who need to worry are those trading and not declaring. They are risking large backdated bills.

Hopefully log their incomings and outgoings

For anyone selling with the intention of making a profit, it doesn't matter if you're signed up to eBay as a business seller or not, if you're selling to make a profit you're acting as a business

Out of the scope of taxation

In this case you don't have to declare that income, but what do you do if HMRC see from Ebay that you have sales over £1k and come after you, how can you prove you brought those records not to resell ?? you can't especially not if those records are say 30/40 years old, it's a bit ridiculous really

@@atters2 but what do you do if HMRC see from Ebay that you have sales over £1k and come after you, how can you prove you brought those records not to resell ?? you can't especially not if those records are say 30/40 years old,

@marksimpson9815 they would have to prove you bought them for resale. Very unlikely that HMRC will be interested in small amounts anyway so most likely a moot point.

I have a huge VHS collection and have around 20,000 been collecting since 1993, i don't believe i should be taxed if i sold any of it even if it went over £1,000 in sales for individual tapes. I have videos on youtube over 10 years old showing that i was buying videos weekly and putting into my collection. Even had news stories about my collection, so surely that's proof enough that i'm not a seller in it for the money ?

Glad it was helpful! :)

If you are not selling as a business or self employed though, you are just selling to get rid of your own used items around the house. Quite easy to hit £1000 turnover on that as well

no you'd need to submit a tax return first

I hope it doesn't go to that level!

Facebook may become busier as a result of the yearly reports of every seller although if doing it as a business and doing your accounts it doesn’t really change what’s already been in place for years… Facebook marketplace & alike could become a chargeable service due to increased demand. I hope it doesn’t go down that route but in the short term I agree it should make markets busier.. can’t wait to get stuck into this season & hope things move the right way for this year …. Happy new year appreciation for the channel !

​@laurenceknight3293 if that's the case we have jumble trails. No need for Facebook market place it's full of time wasters.