HMRC rolls out ‘side hustle tax’ for online sellers on eBay

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HMRC rolls out ‘side hustle tax’ for online sellers on eBay, Vinted and more
Dgital platforms such as eBay, Airbnb, Etsy, Amazon and Vinted must now share seller information with HMRC

www.independent.co.uk

HMRC rolls out ‘side hustle tax’ for online sellers on eBay, Vinted and more

Dgital platforms such as eBay, Airbnb, Etsy, Amazon and Vinted must now share seller information with HMRC
www.independent.co.uk www.independent.co.uk


What do you guys think about this?
Ebay UK is about to ask all UK Sellers to provide National Insurance Numbers to let them give all their personal info and sales income to HMRC.

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phinix said:
HMRC rolls out ‘side hustle tax’ for online sellers on eBay, Vinted and more
Dgital platforms such as eBay, Airbnb, Etsy, Amazon and Vinted must now share seller information with HMRC

www.independent.co.uk

HMRC rolls out ‘side hustle tax’ for online sellers on eBay, Vinted and more

Dgital platforms such as eBay, Airbnb, Etsy, Amazon and Vinted must now share seller information with HMRC
www.independent.co.uk www.independent.co.uk


What do you guys think about this?
Ebay UK is about to ask all UK Sellers to provide National Insurance Numbers to let them give all their personal info and sales income to HMRC.

​

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HMRCs way of monitoring the under reporting of side hustle/small earnings incomes. IMO the £1000 allowance/limit is too small as it is the turnover not the gross profit of such small additional incomes.

I would welcome in the 2024 budget a few changes including this one, all aimed at improving the incomes of the lowest earners i.e. increasing the personal allowance to remove the lowest earners from being taxed entirely, lifting the IHT limit to a more realistic level, if necessary by putting in a taper arrangement. As has been stated for ages the tax system needs to reflect the current state of the UK economy and the skewing effect in regard to earnings & incomes.
 
i saw this as well , odd as i am currently shifting loads of household goods and stuff on ebay prior to spending a lot more time at the greek house
so i do wonder it is would impact on just private sellers downsizing? I must have cleared £3k in the last 12months on selling old hifi and computer kit alone
 
I’m guessing eBay and the like will be changing their policies from a GDPR point of view for this kind of information to be passed on.
 
Mr Bump said:
i saw this as well , odd as i am currently shifting loads of household goods and stuff on ebay prior to spending a lot more time at the greek house
so i do wonder it is would impact on just private sellers downsizing? I must have cleared £3k in the last 12months on selling old hifi and computer kit alone
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Presumably yours are genuine private sales, losing rather making a profit, so although in theory you could be asked to explain yourself there will be no profits to tax.

As for the HMRC actual targets, I think that forcing them to pay taxes is long overdue.
 
Mr Bump said:
i saw this as well , odd as i am currently shifting loads of household goods and stuff on ebay prior to spending a lot more time at the greek house
so i do wonder it is would impact on just private sellers downsizing? I must have cleared £3k in the last 12months on selling old hifi and computer kit alone
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That's what I was thinking, I sold loads of stuff after I cleaned my attic last year.
Sold lots of keyboards, which are expensive, then my whole Sony system when moved to Nikon Zf. You can imagine those items were pretty expensive...
 
wibbly said:
I’m guessing eBay and the like will be changing their policies from a GDPR point of view for this kind of information to be passed on.
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Yeah, they supposed to start sending emails to all sellers to provide National Insurance Number in order to forward details to HMRC.
I guess its time people will start closing ebay accounts...
 
phinix said:
Yeah, they supposed to start sending emails to all sellers to provide National Insurance Number in order to forward details to HMRC.
I guess its time people will start closing ebay accounts...
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to be fair i don't think it will be much of an issue with most people if as thoughts that you can prove you are just selling personal items and not for profit
i am not going to lose much sleep over it , they will be after people running little business enterprises from the back bedroom
 
I cannot see that much has changed???

EBay in particular have been sharing some info on uk sellers with HMRC for over a decade already.

HMRC use it to send out ”nudge” letters asking if any individuals tax position has been reported correctly. If you are just selling off your own personal items there no legal profit (even if you sell for more then your bought as they are classed as wasting assets or chattel’s) and no tax due.

If you are going around buying things specifically to resell (whether from Costco, China, car boot or charity shop) then you are trading for business and there is still the same taxable profit to declare.
 
also looking at this from a logical perspective, if HMRC receive a list of NI numbers with amounts next to them the first thing they will do is run that through the computers and match them against tax records, I would think a large amount would trigger flags for various reasons

[1] already paying tax from full time PAYE jobs - will defo get a letter asking for an explanation if the amount is over the agreed no action limit.

[2] not registered as paying any tax at all , maybe they don't work or are a stay at home mum, the HMRC might then just see if the supposed income is under the personal tax allowance and no action would be taken.

[3] maybe the person has declared a small income and adding there ebay income to there declared income still keeps them under the personal tax allowance limit

[4] also will the HMRC share the data with the DWP and benefits agencies, for me i think that would be a very lucrative way of making gains and finding benefit cheats running little side business.

The big problem is do the HMRC have the manpower of the will to start on the public like this its a tough one.
according to googs there are 200,000 uk business ebay sellers alone
 
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I would think that they'll simply add the information from the web sites to their existing database searching.

There's been enough shown on TV, such as the "fly on the wall" programmes about insurance cheats and others, to show the general public that data matching is an established investigative technique. This additional data will allow them to target the bad lads more accurately but many of them will already have shown up on existing lists.

The sensible thing for those who previously "forgot" to mention their sideline, will be to come forward, before the doorbell rings...

Tax Header.jpg
 
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phinix said:
What do you guys think about this?
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I think it's a good thing. HMRC are not going to come after somebody selling off some used clothing or and old Xbox but there are plenty of people on Amazon and Ebay running businesses and making big profits without paying VAT or tax, they undercut genuine business trying to make an honest living and aren't contributing to the services we need in this country.

They are probably also the first to bitch and moan when they can't see a dentist.
 
wibbly said:
I’m guessing eBay and the like will be changing their policies from a GDPR point of view for this kind of information to be passed on.
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I doubt it. Understandably there are lots of exemptions in the GDPR and there are a couple of pages on Tax. Basically if you collect information that HMRC want then you are "exempt" from the rule saying you can't disclose personal info for this particular info. Even our current law makers aren't _quite_ stupid enough to have missed this one.
Box Brownie said:
HMRCs way of monitoring the under reporting of side hustle/small earnings incomes. IMO the £1000 allowance/limit is too small as it is the turnover not the gross profit of such small additional incomes.
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I agree 1k seems low. I haven't bothered to check but I bet it was set at 1k back when that was a decent amount and hasn't been changed. HMRC seem very fond of these silent effective tax rises. Turnover makes sense though - if you are turning over £800 there's no need to work out net profit. If you turn over £1500 then you need to but still might end up not paying tax.
 
Having done a stint doing IT for HMRC a couple of years ago, I think it's fair to say that they don't currently do Big Data - despite having shedloads of it. They have specific programs to look at specific things. So this request for data is probably alongside a project (being developed by an Indian software house almost certainly, as they are cheap) to try to do something with it, but likely not as clever as people are suggesting above. More likely it will lead to a flurry of "nudge letters" from the aptly named Behaviour Modification Unit on the speculation that some people will be scared into declaring amounts regardless of whether they need to.,
 
lindsay said:
Having done a stint doing IT for HMRC a couple of years ago, I think it's fair to say that they don't currently do Big Data - despite having shedloads of it. They have specific programs to look at specific things. So this request for data is probably alongside a project (being developed by an Indian software house almost certainly, as they are cheap) to try to do something with it, but likely not as clever as people are suggesting above. More likely it will lead to a flurry of "nudge letters" from the aptly named Behaviour Modification Unit on the speculation that some people will be scared into declaring amounts regardless of whether they need to.,
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yep same here worked on a contract that was monitoring inventory software on the mainly surface pro's spent weeks of my life writing AD scripts to try to get the 5% that refused to cooperate eventually bailed the contract and went back to DXC.
 
lindsay said:
Having done a stint doing IT for HMRC a couple of years ago, I think it's fair to say that they don't currently do Big Data - despite having shedloads of it.
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I don't know about HMRC, since the reorganisation, but when I did my two years at Southend, about 25 years ago, there was certainly plenty of heavy metal in evidence.

I went from that to working on a digitisation of the VAT coding manual, all 2,000 pages or so, for one of our bigger retailers. The mainframes could turn heavy duty queries around in real time, which our 486 local test machines would take an hour or more to chug through.

So I think they have the technology and the skills but I don't know if they have the management.
 
They (HMRC) certainly have the compute power and data storage, but big data crunching is a project that to my knowledge is some way off yet.
Like you Paul @Mr Bump I bailed my contract after 5 months managing testing of a number of projects - there were a lot of very competent Cap Gemini staff that I managed and worked with, but it was just a body shop, and a continuous conveyor belt of people in and out from various consultancies
 
phinix said:
What do you guys think about this?
Ebay UK is about to ask all UK Sellers to provide National Insurance Numbers to let them give all their personal info and sales income to HMRC.
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I found this news pretty disgusting to be honest. They say it's £1000 but HOW do they know if you've made that in profit or just turnover? Most people flogging their old photography kit will easily hit the threshold but if you're not running a business then who's keeping records of all this stuff anyway? I think a lot of people will be getting those nudge letters and I just find it absolutely abhorrent.

There are bigger problems need fixed in this country than going after the little guys all the time, and small businesses already suffered enough government interreference during covid.

I for one will definitely not be giving out my NI number to eBay. Not only is it asking too much information but companies like eBay cannot be trusted in terms of data leaks and hacks.
 
PixPete said:
I found this news pretty disgusting to be honest. They say it's £1000 but HOW do they know if you've made that in profit or just turnover? Most people flogging their old photography kit will easily hit the threshold but if you're not running a business then who's keeping records of all this stuff anyway? I think a lot of people will be getting those nudge letters and I just find it absolutely abhorrent.
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That’s the point, the £1000 figure is merely an easement from filing a more detailed self assessment return that separates profit from turnover.

HMRC can request anyone files a self-assessment at any time they choose, and if correctly completed then the income from these sales won’t be in the taxable income sections of the return…
 
all income is taxable , allways has been a lot of thses sites and side hustles have fallen under the radar
especially things such as people on an evening doing deliveroo and uber and lots of other things
we (the country) need more tax to bomb the Houtis
 
But isn't it amazing that they suddenly now need to inspect and collect tax from people selling used clothes to put food on their table or keep the heating on, yet 40 years ago anyone could run a massive cash based business and get away with it. The country was just fine.
 
I'm kind of torn with this. Whilst I do believe there will be some substantial traders who will be rightly caught out, I can't help but wonder if there will be a similar vigour applied to targeting the elite and Big Corp. with the various tax mechanisms so that they can pay a ridiculously low effective tax rate? (i.e. like Fishy, Google etc)
 
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if you are buying and selling and making profit you are essentially a business even if its back bedroom stuff
as HMRC seem to be saying they will look the other for a couple of grand but after that pay the man, seems fair.
there are a lot of people out there in the cash culture avoiding a lot of tax for sure as well one of the reasons i avoid using case as much as i can now.
 
I would prefer that exported profits are Taxed here (Facebook, Amazon, Google, Starbucks to name a few) It would need Jeremy Hunt to git his fingers out of which ever pot they are in. I can't see that happening. I don't trust him to do the right thing.
 
PixPete said:
There are bigger problems need fixed in this country than going after the little guys all the time, and small businesses already suffered enough government interreference during covid.
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Tax evasion is a big problem that needs to be fixed.

I pay my taxes PAYE from the wages I earn to keep the heating on and put food on the table and don't have a "side hustle", People that make their money not through employment that is taxed at source should also be made to pay tax and not get special exemptions from paying tax simply because they are not earning as employees.
 
The issue is that a lot of business is not "seen" by The Man. The move to catch people trading online is fair enough, albeit as usual they are hitting the little man rather than the multinational corporate. What they are unable to do, it seems, is deal with the cash culture that has arisen in recent years, especially post-pandemic, at all of the barbers, car washes, nail bars, and dare I say builders/roofers. We see loads of people spending from wads of cash at local retail outlets, people who don't seem the sort to be buying £120 bottles of perfume for their girlfriends, and of course this ignores the drug business which is rife and into which otherwise sensible people are drawn to become dealers because it's easier and tax-free compared to a proper job, with little chance of being caught nowadays. I know of one person - relative of a colleague - who gave up investment banking to become a cocaine dealer in London, double the income and no tax and pretty unlikely to get caught.
 
lindsay said:
The issue is that a lot of business is not "seen" by The Man. The move to catch people trading online is fair enough, albeit as usual they are hitting the little man rather than the multinational corporate. What they are unable to do, it seems, is deal with the cash culture that has arisen in recent years, especially post-pandemic, at all of the barbers, car washes, nail bars, and dare I say builders/roofers. We see loads of people spending from wads of cash at local retail outlets, people who don't seem the sort to be buying £120 bottles of perfume for their girlfriends, and of course this ignores the drug business which is rife and into which otherwise sensible people are drawn to become dealers because it's easier and tax-free compared to a proper job, with little chance of being caught nowadays. I know of one person - relative of a colleague - who gave up investment banking to become a cocaine dealer in London, double the income and no tax and pretty unlikely to get caught.
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Greed knows no boundaries!
 
lindsay said:
The issue is that a lot of business is not "seen" by The Man. The move to catch people trading online is fair enough, albeit as usual they are hitting the little man rather than the multinational corporate. What they are unable to do, it seems, is deal with the cash culture that has arisen in recent years, especially post-pandemic, at all of the barbers, car washes, nail bars, and dare I say builders/roofers. We see loads of people spending from wads of cash at local retail outlets, people who don't seem the sort to be buying £120 bottles of perfume for their girlfriends, and of course this ignores the drug business which is rife and into which otherwise sensible people are drawn to become dealers because it's easier and tax-free compared to a proper job, with little chance of being caught nowadays. I know of one person - relative of a colleague - who gave up investment banking to become a cocaine dealer in London, double the income and no tax and pretty unlikely to get caught.
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yep spot on when i go fill my car up down Ravensthorpe which is heavilly Asian the amount of huge new SUVs that roll up and put 150 quid of diesel in and pay in crumpled 10s and 20s its all black market money
 
Mr Bump said:
yep spot on when i go fill my car up down Ravensthorpe which is heavilly Asian the amount of huge new SUVs that roll up and put 150 quid of diesel in and pay in crumpled 10s and 20s its all black market money
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And you know this 100% for sure, how? Just curious that you can be so emphatic with saying "all" :thinking:
 
Box Brownie said:
And you know this 100% for sure, how? Just curious that you can be so emphatic with saying "all" :thinking:
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While 100% is a high barrier to jump, anyone paying cash these days is bound to be suspect.

It's like anyone driving a tatty old diesel powered van. According to many and varied "fly on the wall" programmes on TV, they will be carefully considered for being pulled over and having a tube pushed into their filler hole. The impression given is that on most occassions, the fluid sucked out will be red.
 
lindsay said:
The issue is that a lot of business is not "seen" by The Man. The move to catch people trading online is fair enough, albeit as usual they are hitting the little man rather than the multinational corporate. What they are unable to do, it seems, is deal with the cash culture that has arisen in recent years, especially post-pandemic, at all of the barbers, car washes, nail bars, and dare I say builders/roofers. We see loads of people spending from wads of cash at local retail outlets, people who don't seem the sort to be buying £120 bottles of perfume for their girlfriends, and of course this ignores the drug business which is rife and into which otherwise sensible people are drawn to become dealers because it's easier and tax-free compared to a proper job, with little chance of being caught nowadays. I know of one person - relative of a colleague - who gave up investment banking to become a cocaine dealer in London, double the income and no tax and pretty unlikely to get caught.
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If the HMRC Connect system is advanced as it apparently seems to be, it should be able to catch people like this with relative ease by looking at his lifestyle purchases and cross checking everything, I would think that a subsequent demand to prove how everything is funded would reveal all?

I've also noticed that a lot of CFD day traders are resident in Dubai, but certainly don't seem to be native to that country. I'm presuming it is for a more attractive tax system. I don't blame them, we are taxed so heavily here for what appears to be ever worsening public services.
 
Generalisations are by their nature inaccurate, so I think what MrBump was saying was the general impression created by behaviour rather than a statement of fact. It's an impression underlined by Andrew's subsequent comment. Although round here there are loads of obviously knackered diesel vehicles pumping out moT-failure levels of black smoke but no vehicles are ever stopped, despite that, duff lights, duff exhausts and consequent probable lack of insurance and VED to boot.
I suspect any HMRC system is stymied by the fact that most of this business doesn't go through bank accounts - after all, banks have to challenge the source of anything over £10k cash I believe. Indeed HMRC is generally dependent on information being passed on by institutions or voluntarily given by taxpayers.
 
lindsay said:
I suspect any HMRC system is stymied by the fact that most of this business doesn't go through bank accounts - after all, banks have to challenge the source of anything over £10k cash I believe.
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Plus of course the fact that they are closing high street branches, left right and center, making it hard to pay in cash.
 
AndrewFlannigan said:
While 100% is a high barrier to jump, anyone paying cash these days is bound to be suspect.

It's like anyone driving a tatty old diesel powered van. According to many and varied "fly on the wall" programmes on TV, they will be carefully considered for being pulled over and having a tube pushed into their filler hole. The impression given is that on most occassions, the fluid sucked out will be red.
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Point taken on both areas but as the saying goes "to assume makes an ass out you and & me"
gman said:
If the HMRC Connect system is advanced as it apparently seems to be, it should be able to catch people like this with relative ease by looking at his lifestyle purchases and cross checking everything, I would think that a subsequent demand to prove how everything is funded would reveal all?
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Such a thought occurred to me but I can only surmise that unless "he" makes a move that draws attention.......there needs to be a system (automated?) of checks to reveal the irregular income to spend ratio? Not enough civil servants to do it all manually.
gman said:
I've also noticed that a lot of CFD day traders are resident in Dubai, but certainly don't seem to be native to that country. I'm presuming it is for a more attractive tax system. I don't blame them, we are taxed so heavily here for what appears to be ever worsening public services.
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Lots of expats abroad for financial reasons.
lindsay said:
Generalisations are by their nature inaccurate, so I think what MrBump was saying was the general impression created by behaviour rather than a statement of fact. It's an impression underlined by Andrew's subsequent comment. Although round here there are loads of obviously knackered diesel vehicles pumping out moT-failure levels of black smoke but no vehicles are ever stopped, despite that, duff lights, duff exhausts and consequent probable lack of insurance and VED to boot.
I suspect any HMRC system is stymied by the fact that most of this business doesn't go through bank accounts - after all, banks have to challenge the source of anything over £10k cash I believe. Indeed HMRC is generally dependent on information being passed on by institutions or voluntarily given by taxpayers.
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Not helped by too few civil servants with experience & knowledge to work on individual case files:(
Cobra said:
Plus of course the fact that they are closing high street branches, left right and center, making it hard to pay in cash.
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AFAIK & IIRC
It was getting more and more costly in business account bank charges to 'bank' cash (and cheques) with drive to towards closing branches and going digital.
 
Box Brownie said:
It was getting more and more costly in business account bank charges to 'bank' cash
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Not everyone that needs to bank cash has a business account, and that is no reason to punish everyone else.
 
Cobra said:
Not everyone that needs to bank cash has a business account, and that is no reason to punish everyone else.
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Granted but it seems that for the banks to physically 'handle' the cash changed and the cost of doing so went up... ...and like all 'costs' the customer ends up paying for it!
 
I use cash as much as possible. If I'm "holding folding", I know I can afford to spend it.
 
Nod said:
I use cash as much as possible. If I'm "holding folding", I know I can afford to spend it.
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Before Covid I very much used cash for incidental smaller spends i.e. carried say £30-50 but always used the CC on the likes of the weekly shop or bigger discretionary spends e.g. meal out with the family. Post Covid I rarely have cash but do keep a tenner in my wallet for emergencies.
 
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