I buy and sell on eBay for a hobby at a loss. Should I tell the tax man?
I started when my girl dropped her phone down the toilet. I bought a broken iphone and fixed it. From then on I have been hooked. I love buying gadgets and trying to fix them. Sometimes I'm lucky and fix them. Other times I'm not so lucky and make them worse but I enjoy doing it. I physically deplete myself during the weekend so a mental challenge at the weekend keeps me entertained.
Anyway I'm yet to make money from it. Is this ok? Can I still buy and sell freely and enjoy my hobby or should I make this known to the tax man.
EBay says you can trade 3000 per year before telling the taxman, even then it's just a hobby and you can be exempt. They are just after people using eBay as a high source of income and not declaring it
Tell him what? That you're a failure as an ebay trader and haven't made any money? HMRC isn't likely to care!
Your little Ebay business is showing a loss for the year? Yes, you can file a business schedule C or C-EZ. Have all records of income and costs. If you make a profit you pay a FICA tax. Loss can be deducted from gross income. Sounds like a lot of work for the results.
Some interesting opinions there.
In principle if you are trading you must report the trade. HMRC may ignore small activity but the principle is clear.
You say you are "yet to make money from it". Any technician or higher grade will call it "trading with the intention of making a profit.
You would do best to write to HMRC, state how much you are trading, how big the loss is and ask if you need to register for Self Assessment. You would also be well advised to have a separate bank account for these transactions - so that you can show your loss.
ebay WILL report the trading activity - it is automatic and computers see to that. Low, small trading (especially in second hand goods MAY be ignored.
I sympathise with your position and understand it is a bit of fun (I love disassembling and mending as well) but you need this shown on your record before a flag is added to your record.
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