Sidehustle Tax
Discussion
What seems to me a complicated area, probably not to alot of people..
I've started buying and selling bits and pieces on Ebay and the like and typically I've missed the easy money gravy boat as the gov brought in rules for those companies this year that any seller that sells more than 30 items or more than £1000 needs to be reported to HMRC so they can send a letter with their hand out.
Given I've sold about £4k so far this year already then I'll be on the list.
As I'm buying so much of similar items I can't claim they are personal items I don't think.
My question though is that I'm buying a small bundle, keeping part of it and then selling on most of it for about what I bought it for, sometimes a bit more, sometimes a bit less. Keeping those bits for my collection. How do I work out "Profit" when the time comes at the end of the year? The bits I keep are for me so are personal items? How do you factor those into the calculation because if you look at the bulk part that I buy and then sell its cost neutral, ish.
I think I'm going to task the Mrs to do the "selling" from now on as that means the tax will only be paid at 20% rather then 40% as I'm already well in that bracket with my day job so that's a bit of saving.
This is video games by the way. Buy a console with games, keep a few games and sell the console and what games I don't need back on Ebay.
I've started buying and selling bits and pieces on Ebay and the like and typically I've missed the easy money gravy boat as the gov brought in rules for those companies this year that any seller that sells more than 30 items or more than £1000 needs to be reported to HMRC so they can send a letter with their hand out.
Given I've sold about £4k so far this year already then I'll be on the list.
As I'm buying so much of similar items I can't claim they are personal items I don't think.
My question though is that I'm buying a small bundle, keeping part of it and then selling on most of it for about what I bought it for, sometimes a bit more, sometimes a bit less. Keeping those bits for my collection. How do I work out "Profit" when the time comes at the end of the year? The bits I keep are for me so are personal items? How do you factor those into the calculation because if you look at the bulk part that I buy and then sell its cost neutral, ish.
I think I'm going to task the Mrs to do the "selling" from now on as that means the tax will only be paid at 20% rather then 40% as I'm already well in that bracket with my day job so that's a bit of saving.
This is video games by the way. Buy a console with games, keep a few games and sell the console and what games I don't need back on Ebay.
You just need to register for self assessment and document expenditure vs sales. And then pay tax on the profit. You made a profit right? Did you buy any office equipment, travel to collect or deliver or post stuff.
Did you buy paper envelopes etc?
Or
In this financial year pay all the profit direct to a pension, so years in the future you can actually retire.
Did you buy paper envelopes etc?
Or
In this financial year pay all the profit direct to a pension, so years in the future you can actually retire.
Pit Pony said:
You just need to register for self assessment and document expenditure vs sales. And then pay tax on the profit. You made a profit right? Did you buy any office equipment, travel to collect or deliver or post stuff.
Did you buy paper envelopes etc?
Or
In this financial year pay all the profit direct to a pension, so years in the future you can actually retire.
Cheers, I'm just not sure how much it's looked into. If I buy console S/N: 1234 for £150 then sell that same console for £140 does that get classed as a loss or does it get looked into that when I bought it it had 20 games and when I sold it it had 10 games? If so do they ask where those games are? The estimated value etc etc?Did you buy paper envelopes etc?
Or
In this financial year pay all the profit direct to a pension, so years in the future you can actually retire.
I already put alot into my pension and I could put any extra from this into it but at some point I'd like to earn more than £50k taxable pay haha. So I don't mind paying the tax if I have too I just don't know how I accurately calculate it!
Eric Mc said:
It’s not looked into much at all. The emphasis is on the taxpayer obeying their legal obligations.
As my accountant once said to me.What's the risk ? Combination of how likely are they to find our vs what extra will it cost if they did vs what do you save if they don't? Your call.
Yesterday I donated 20 quid to a hospice, as my future son in law was doing a marathon in memory of his mother, who died of cancer. I'd already previously donated, but my none tax paying sister in law who doesn't do computers, asked me to donate on her behalf.
Not thinking, I automatically ticked the gift aid button and the hmrc added 5 quid. My wife now thinks we will all go to prison for tax evasion. My sister in law gave me 20 quid later, not sure why as I've started calling myself Auntie Helen and felt the urge to donate under that alias
Hondashark said:
Pit Pony said:
You just need to register for self assessment and document expenditure vs sales. And then pay tax on the profit. You made a profit right? Did you buy any office equipment, travel to collect or deliver or post stuff.
Did you buy paper envelopes etc?
Or
In this financial year pay all the profit direct to a pension, so years in the future you can actually retire.
Cheers, I'm just not sure how much it's looked into. If I buy console S/N: 1234 for £150 then sell that same console for £140 does that get classed as a loss or does it get looked into that when I bought it it had 20 games and when I sold it it had 10 games? If so do they ask where those games are? The estimated value etc etc?Did you buy paper envelopes etc?
Or
In this financial year pay all the profit direct to a pension, so years in the future you can actually retire.
I already put alot into my pension and I could put any extra from this into it but at some point I'd like to earn more than £50k taxable pay haha. So I don't mind paying the tax if I have too I just don't know how I accurately calculate it!
Pit Pony said:
my none tax paying sister in law who doesn't do computers, asked me to donate on her behalf.
Not thinking, I automatically ticked the gift aid button and the hmrc added 5 quid. My wife now thinks we will all go to prison for tax evasion. My sister in law gave me 20 quid later, not sure why as I've started calling myself Auntie Helen and felt the urge to donate under that alias
If you used her name You won’t go to prison , she might get a letter with a bill from HMRC though for the tax the charity claimedNot thinking, I automatically ticked the gift aid button and the hmrc added 5 quid. My wife now thinks we will all go to prison for tax evasion. My sister in law gave me 20 quid later, not sure why as I've started calling myself Auntie Helen and felt the urge to donate under that alias
It’s not free money for charities, tax has to have been paid at some point - some of our local church members got bills for ticking the box….
(You might go to prison if you used her money with your name for the donation to save your tax bill though)
https://www.which.co.uk/news/article/gift-aid-warn...
Wasn’t aware of the 30 items rule myself I’ve already passed that number this year however all personal stuff, kids old toys, some other household bits including a Yale alarm system I parted out selling sensors etc when the main controller failed. Guess I’ll be getting a letter from HMRC next year.
AndyAudi said:
Pit Pony said:
my none tax paying sister in law who doesn't do computers, asked me to donate on her behalf.
Not thinking, I automatically ticked the gift aid button and the hmrc added 5 quid. My wife now thinks we will all go to prison for tax evasion. My sister in law gave me 20 quid later, not sure why as I've started calling myself Auntie Helen and felt the urge to donate under that alias
If you used her name You won’t go to prison , she might get a letter with a bill from HMRC though for the tax the charity claimedNot thinking, I automatically ticked the gift aid button and the hmrc added 5 quid. My wife now thinks we will all go to prison for tax evasion. My sister in law gave me 20 quid later, not sure why as I've started calling myself Auntie Helen and felt the urge to donate under that alias
It’s not free money for charities, tax has to have been paid at some point - some of our local church members got bills for ticking the box….
(You might go to prison if you used her money with your name for the donation to save your tax bill though)
https://www.which.co.uk/news/article/gift-aid-warn...
AndyAudi said:
Pit Pony said:
my none tax paying sister in law who doesn't do computers, asked me to donate on her behalf.
Not thinking, I automatically ticked the gift aid button and the hmrc added 5 quid. My wife now thinks we will all go to prison for tax evasion. My sister in law gave me 20 quid later, not sure why as I've started calling myself Auntie Helen and felt the urge to donate under that alias
If you used her name You won’t go to prison , she might get a letter with a bill from HMRC though for the tax the charity claimedNot thinking, I automatically ticked the gift aid button and the hmrc added 5 quid. My wife now thinks we will all go to prison for tax evasion. My sister in law gave me 20 quid later, not sure why as I've started calling myself Auntie Helen and felt the urge to donate under that alias
It’s not free money for charities, tax has to have been paid at some point - some of our local church members got bills for ticking the box….
(You might go to prison if you used her money with your name for the donation to save your tax bill though)
https://www.which.co.uk/news/article/gift-aid-warn...
te, have gained in sales, and how much gift aid that they claimed on it. £200 and £50 gift aid based on my attic clear out. I'm a tax payer but avoiding 40% by pension contributions. Just to clarify a few things.
"I've started buying and selling bits and pieces on Ebay and the like and typically I've missed the easy money gravy boat as the gov brought in rules for those companies this year that any seller that sells more than 30 items or more than £1000 needs to be reported to HMRC so they can send a letter with their hand out."
There never was an easy money gravy train. The HMRC rules have always been, if you sell something to make a profit, then you are a business and must register and file a self assesment.
There used to be a £1000 turnover allowance (not profit) introduced to allow people to have a go at maybe starting something on the side before committing.
You can sell any amount of personal possessions you want up to any value, as a private seller, providing that you are not doing so to make a profit and can prove as such.
When you start making profits, this is when you will and should start paying tax/capital gains.
This push by HMRC a few months ago was aimed to deter people from wheeling and dealing and posing as private sellers and to make it clear that they need to pay tax. eBay, Facebook was full of them, there are now less of them, so job done in my book.
"I've started buying and selling bits and pieces on Ebay and the like and typically I've missed the easy money gravy boat as the gov brought in rules for those companies this year that any seller that sells more than 30 items or more than £1000 needs to be reported to HMRC so they can send a letter with their hand out."
There never was an easy money gravy train. The HMRC rules have always been, if you sell something to make a profit, then you are a business and must register and file a self assesment.
There used to be a £1000 turnover allowance (not profit) introduced to allow people to have a go at maybe starting something on the side before committing.
You can sell any amount of personal possessions you want up to any value, as a private seller, providing that you are not doing so to make a profit and can prove as such.
When you start making profits, this is when you will and should start paying tax/capital gains.
This push by HMRC a few months ago was aimed to deter people from wheeling and dealing and posing as private sellers and to make it clear that they need to pay tax. eBay, Facebook was full of them, there are now less of them, so job done in my book.
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