eBay

eBay, the online auction website, has been hugely successful. At any one time it has well over 100 million registered users (10 million in the UK). It has been used increasingly by businesses with stock to shift or out of date equipment to unload. However until earlier this year, only individuals were allowed to register with the inevitable result that many businesses registered and traded as individuals.

UK businesses can now officially join eBay and can also sign up for a PayPal account allowing them to send and receive credit and debit card payments online. Don’t forget that anything sold on eBay should be reflected in the business books in the normal way.

Private sellers registering on eBay can sell unwanted items online. Are there tax considerations? ….. it all depends.

Sales of high value items such as paintings and antiques may incur capital gains tax but generally only if the amount generated exceeds £6,000.

There are so called ‘power sellers’ who buy goods specifically to sell them online and in some cases give up their day jobs to concentrate on this. These individuals are trading and should be paying tax on their profits.

Not surprisingly the Inland Revenue is keen to catch up with these people and ensure they are complying with the law and paying any tax that is due. eBay has met with the Inland Revenue to discuss the way forward. There are no specific measures yet in place to tackle the problem but it is likely that this will change. Watch this space!