Have I seriously messed up - eBay?!

[GE90]

Hi all

I’m getting a little concerned with some readying I’ve done!

I have a Golf MK8 Clubsport, and was disappointed with the factory audio. Being a former aircraft engineer I decided to play around with upgrading the centre speaker, with fantastic results. This involved someone 3D printing an adapter ring for me, and the making up of a plug and play wiring conversion harness.

Pleased with the results I placed a thread on a few forums I use, and soon received requests to make some up for members. Enjoying the process I purchased nice boxes, packaging, speakers, adapters, wiring components and also printed instructions. There are two versions, one at £149, the other at £229. I sold a few but members were hesitant buying from a stranger on a forum and asked that I placed on eBay so they had protection.

I did this and have sold many over the last year or so. However, having a day job and being a 40% tax payer, I’m concerned that, as I seem to have exceeded the selling threshold and therefore requiring eBay to pass info to the HMRC, I’m going to be charged tax.

Can I ask if anyone knows how this works please? I 100% have no issue with paying any tax due, however, the parts to make both kits (I obviously pay retail price for them) mean I only make less than £20 profit on each sale (the value is in the enjoyment of ‘keeping my hand in”, as these involve riveting and crimping!).

Can I ask whether I might have to pay 40% on the sales price, or on the profit? If on the sale price I’ll be owing £100’s/£1000’s that I haven’t earn’t - so loosing say £40 - £85 per sale!

Hopefully I’ve misunderstood, otherwise I’ve been caught in a pickle as a genuine hobbiest really doing this for fun!

Really appreciate any thoughts to put my mind at rest and whether I should stop straight away to avoid inadvertently owing money on every sale!

Thanks.

[bompey]

Yes the revenue will be reported which may trigger an investigation, but you then need to have your cost of sales. You won’t be taxed on revenue, just profit.

[GE90]

That’s a relief! Thanks.

So perhaps asked to submit a tax return? I record all my purchase of parts, so everything can be evidenced.

Is there an allowance for my ‘labour” in making these up? Each one takes a few hours!

Thanks again.

[egomeister]

Also worth bearing in mind there is a HMRC allowance for miscellaneous income that covers small but paid work - £1000 a year I think

[Puzzles]

Don’t wait for HMRC to ask you

[Simpo Two]

egomeister said:

Also worth bearing in mind there is a HMRC allowance for miscellaneous income that covers small but paid work - £1000 a year I think

Yes. https://www.gov.uk/guidance/tax-free-allowances-on...

Above that you'd pay income tax, in your case at 40%, on the profit. As you have records of costs that should be easy to prove.

£20 - 40% = £12 = half a pub lunch. As you can see there's a point where taxation extinguishes enterprise!

[ferret50]

Raise your selling price and blame Rachel from accounts?

[Panamax]

GE90 said:

Can I ask whether I might have to pay 40% on the sales price, or on the profit?

Assuming this isn't just pennies you'll need to fill in a self-assessment tax return after the end of the tax year in April. It can be done online.

There's a question that asks if you have any self-employment income. When you say "yes" you then go on and complete the self-employment boxes.

You are taxed on your profit, not your sales income, so you will need to set out your costs incurred as well as your cash received.

No, you can't claim anything for your own time and effort. (Your income tax bill would be same either way in any event.)

[Panamax]

Note that the £1,000 HMRC de minimis allowance for small trading is calculated on your sales income, not your profit, so probably won't help you here.

[princeperch]

I suspect but don't know for sure that whilst the sales will get reported, HMRC will actually only be interested and send you a nudge letter if you go over 6k or whatever the personal allowance is for selling your own chattels every year.

Personally I'd wait for the nudge letter which might never come because you'll likely be in no worse a position than if you fees up now. Obviously if you're talking 10-20k or whatever you'll be getting a letter but If it's only 3-5k you might get lucky.

[GE90]

Thanks everyone, this is so much help - I think I now understand, ish!

I have a digital report from eBay, (which I think is what they send to the HMRC) and they seem to use calendar year (so mine is total for 2025). The only issue is that they include all sales, so a few personal belongings too.

I'm not sure how this would work, as they are not itemised? These shouldn't be subject to tax?

My total is just under £6k, but profit about £800 on the speakers. So tax is say £160.

Just not sure how to agree what needs to be removed from the report total as personal bits sold....

Thanks again, really appreciated.