Selling goods safely on eBay When do you pay tax?

If you're clearing out your house and selling a few things on eBay a couple of times a year, you won't have to pay income tax on what you make. You'll have to pay capital gains tax only if the profit you make is more than £8,500 during the tax year. Lots of items, including anything with a sale price of up to £6,000, are exempt from this tax, anyway. 

However, if you're selling items more regularly, Revenue & Customs may consider you to be a trader in which case you might have to pay income tax and VAT. To check whether you are liable for tax, see HMRC or refer to the Which? Tax guides.

Payment disputes

Once a buyer has bid on an item in an eBay auction, they are legally bound to pay you if they end up being the highest bidder. In most cases, buyers pay up but, if they don't, eBay has a system in place to deal with them. 

When the auction finishes, you email the buyer an invoice to request payment. If they don't pay up within seven days, you can notify eBay and it will remind the buyer to pay. If you are still unable to resolve the dispute, you can offer your unsold item to the next highest bidder or receive a refund of your seller's fee. 

The buyer who didn't pay you will then receive a strike on their eBay account. After several strikes, their account may be suspended.

Cookies at Which? We use cookies to help improve our sites. If you continue, we'll assume that you're happy to accept our cookies. Find out more about cookies