The Student Room Group

is there any legal requirements when selling on ebay?

i want to make some money and not do some job that will pay me less then 4 pounds an hour. im thinking of selling online so i can pay for my courses but where do i start i.e who do i talk to about tax and what are the legal requirements?
will it be considered as a job because when i do sell online i will try to make profit.
Strictly speaking you'd be a self employed merchant. If you're doing anything more than a stay at home Mum selling old baby clothes, ideally you'd register with HMRC for self assessment tax. The volume you'd have to do would be huge to get yourself past the personal allowance though.
Reply 2
Original post by marigoldOdd
i want to make some money and not do some job that will pay me less then 4 pounds an hour. im thinking of selling online so i can pay for my courses but where do i start i.e who do i talk to about tax and what are the legal requirements?
will it be considered as a job because when i do sell online i will try to make profit.


Doing a one-off clearout sale or selling some second-hand stuff every now and then won't draw the eye of the tax man. But if you buy and sell on a regular basis then the profit earned from that is taxable income.

If you're not likely to earn more than the personal allowance (currently £10,600 per year, £11k from April) then you won't pay any tax. That's combined income though, so it includes all the money you earn through jobs and selling stuff and any other (taxable) income sources you have (student loans aren't taxed).

I think technically you do have to report your income to HMRC even if you don't earn enough to be taxed anything, but it probably depends on exactly what amounts you're looking at as to whether you can fly under the radar or not, so to speak. I suggest reading up on the subject, there's plenty of information online about setting up a shop on eBay or similar, and there's also loads of info about tax and self-assessment on the gov.uk website and the CAB.
Original post by Dez
Doing a one-off clearout sale or selling some second-hand stuff every now and then won't draw the eye of the tax man. But if you buy and sell on a regular basis then the profit earned from that is taxable income.

If you're not likely to earn more than the personal allowance (currently £10,600 per year, £11k from April) then you won't pay any tax. That's combined income though, so it includes all the money you earn through jobs and selling stuff and any other (taxable) income sources you have (student loans aren't taxed).

I think technically you do have to report your income to HMRC even if you don't earn enough to be taxed anything, but it probably depends on exactly what amounts you're looking at as to whether you can fly under the radar or not, so to speak. I suggest reading up on the subject, there's plenty of information online about setting up a shop on eBay or similar, and there's also loads of info about tax and self-assessment on the gov.uk website and the CAB.


so if i don't work and regularly sell products (not my own designed products- most likely just random) and i make 10k, would i still need to report this to HMRC?
Reply 4
Original post by marigoldOdd
so if i don't work and regularly sell products (not my own designed products- most likely just random) and i make 10k, would i still need to report this to HMRC?


You would need to do a self-assessment, yes.
Original post by Dez
You would need to do a self-assessment, yes.


i did, but it says i dont need to be taxed. do you have to make ove 50k to get teaxed or something?
Reply 6
Original post by marigoldOdd
i did, but it says i dont need to be taxed. do you have to make ove 50k to get teaxed or something?


Any income over the personal allowance (£10,600) will be taxed, so you're just under the limit.
Reply 7
Original post by marigoldOdd
so if i don't work and regularly sell products (not my own designed products- most likely just random) and i make 10k, would i still need to report this to HMRC?


It also depends on what you mean by "make 10k"... if that is your net profit after deducting cost of sales (buying stock), postage, packaging, etc then you will definitely need to declare it to HMRC.

This might interest you:
http://www.telegraph.co.uk/finance/personalfinance/money-saving-tips/10920308/How-to-set-up-a-successful-eBay-business.html
http://www.dailymail.co.uk/news/article-2546386/I-swapped-drudgery-earn-100-000-selling-bits-bobs-eBay.html
http://www.dailymail.co.uk/news/article-3170820/How-rake-17million-year-without-leaving-spare-room-eBay-rich-list-ranks-30-Brits-ve-fortunes-site.html

https://www.netvouchercodes.co.uk/blog/the-ebay-power30-index/

Warning: it's not as easy as it looks... :wink:
(edited 7 years ago)
Original post by marigoldOdd
i did, but it says i dont need to be taxed. do you have to make ove 50k to get teaxed or something?


You are thinking about VAT registration which is a different thing.

If you earn income of more than your personal allowance you are liable to income tax. If you go over the VAT registration threshold you are also required to register and account for VAT (and to charge the applicable rate to the products being sold).

You should also become conversant with consumer protection legislation as you will be a trader.
Original post by Ethereal
You are thinking about VAT registration which is a different thing.

If you earn income of more than your personal allowance you are liable to income tax. If you go over the VAT registration threshold you are also required to register and account for VAT (and to charge the applicable rate to the products being sold).

You should also become conversant with consumer protection legislation as you will be a trader.

where do i sign up as the things on gov.uk is very confusing, it says i don't need to be taxed and but everyone that works is taxed, and then it says the first 5000 i make won't be taxed......
its so confusing
assuming you're only selling casually (like I don't want this jumper and I'll sell it) you're probably not going to need to do anything as you won't make much money from it
Reply 11
Original post by marigoldOdd
where do i sign up as the things on gov.uk is very confusing, it says i don't need to be taxed and but everyone that works is taxed, and then it says the first 5000 i make won't be taxed......
its so confusing


You don't need to "sign up" - start generating the income, then worry about tax.

But Self Assessment info is here:
https://www.gov.uk/undeclared-income
and
https://www.gov.uk/check-if-you-need-a-tax-return

Sole Trader: https://www.gov.uk/working-for-yourself
Original post by jneill
You don't need to "sign up" - start generating the income, then worry about tax.

But Self Assessment info is here:
https://www.gov.uk/undeclared-income
and
https://www.gov.uk/check-if-you-need-a-tax-return

Sole Trader: https://www.gov.uk/working-for-yourself


your right, im just so scared of the gov, they seem to have a tendency of picking on the small guys, before they demanded ebay to give them names of sellers etc. ive already sold an item on ebay so i know how it works however its the tax stuff that gives me nightmares :s-smilie:

thanks for your help
Reply 13
Original post by marigoldOdd
your right, im just so scared of the gov, they seem to have a tendency of picking on the small guys, before they demanded ebay to give them names of sellers etc. ive already sold an item on ebay so i know how it works however its the tax stuff that gives me nightmares :s-smilie:

thanks for your help


No, they don't pick on small guys. It's too much hassle and expense for them.

If you are only making a few pounds profit occasionally they are honestly not interested. If you are selling hundreds of items on a regular basis they could well "knock on your door", but even then so long as you have good records and you pay any due tax within the tax year you will be fine.
Original post by marigoldOdd
im just so scared of the gov, they seem to have a tendency of picking on the small guys,


:rofl: they really don't prioritise picking on the small guy
Original post by Ethereal
:rofl: they really don't prioritise picking on the small guy


many of the 'small guys' that have been 'picked on' for Ebay trading are in fact fairly sizeable businesses , which if they were operating from a shop or market stall would be paying quite a bit in tax ...

HMRC have a habit of advising people who come to their attention and are on the margins of being seen as definitely not a hobby trader that they need to restrict their activity or start registering as self employed and doing self assessment as the costs of getting investigated are passed on the person who gets investigated
(edited 7 years ago)

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