Trading allowance question

Hi, I run a software-as-a-service business as a sole trader, and have an accountant complete my self-assessment tax return for me. If then unrelated to this business, I sell old personal possessions (such as furniture / electronics etc.) on Ebay / facebook marketplace / other sites (not as a business / trader, just like any normal person would), probably amounting to a few hundred pounds - less than what I bought said items for, would this have any tax implications? Would I need to pay tax? Would I need to declare this to HMRC in my tax return? Moreover, what would happen in the (unlikely) event that I sold an item for slightly more than I bought it for? Would this require me to declare it to HMRC, even if it is a small amount (i.e. £20)? I know there is a £1k trading allowance, however is this used up by my business (even though it makes more than 1k, and I pay tax)? Thanks in advance.

Hi,

As most of the items will be sold for less than what you paid for them, there will be no profit made and you do not need to declare this income. On the rare occassion that something sells for higher than cost price, this will be covered by the 'losses' from the other items sold.

Thank you.

Hi, I'm selling my dvds on ebay at a lower price than I originally bought years ago, and recently (no proof receipt ect) I watch lots of films and still buy and receive as gifts the odd couple! Im a bit of a horder so have around 3-5000 dvds most I have removed from the cases and are in folders as this saves space. charities wont take them and i dont want to take them the tip! I needed to get rid of some them and listed on ebay at least I could get some of my money back. Now I'm worried that I need to declare this because I have sold alot cheap within a month. Would I need to provide any evidence of receipt ect to prove I'm not making a profit or do hmrc just take my word as I don't have receipts.

Hi,
Please refer to guidance at:
Selling online and paying taxes - information sheet
Thank you.

From my understanding and research, since I'm not buying items to sell for profit, I don't need to declare anything as I'm not making any profits from my personal items. I will also still have a £1000 trading allowance (that won't be affected by selling my DVDs non profit). If I am to sell a single Item over £6000 "profit or not", I need to declare it. Please correct me if I am wrong in my findings, admin.

Hi Fantree,
There are two taxes in question here.
Capital Gains tax on the disposal of personal assets and income tax on profits of items bought and sold with the intention of makinga profit.
The trading income allowance is only available to set against profits for income tax, where your are self employed as a sole trader.
It cannot be set against capital gains arising from the disposal of personal assets.
If you dispose of a single asset or a collection of items, for more than £6000, you are required to declare it.
Have a look at:
Report and pay your Capital Gains Tax.
Thank you. 

 

Hello admin, If you dispose of a single asset or a collection of items for more than £6,000, you are required to declare it. Regarding one of your answers, if you I were to sell a collection in one sale for £6,000 or more, I would need to declare it. However, if I were selling items individually for less than £6,000 each (for example, £8 each), you do not need to declare this, even if the total amount you sell over the year or years adds up to £6,000 or more. Again, this not making a profit from these sales and are simply getting some of my money back. Thanks.

Hi Admin, To return to my original question, do I need to declare my sales of DVDs to HMRC, even though I'm not making any profit? I actually buy DVDs to watch, but then I need to sell them as they build up, and the money helps me fund the purchase of a different title to watch. Thank you.

Hi Fantree

Please refer to the online tool within the link at Selling online and paying taxes - information sheet

Thank you