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Earnings from selling personal possessions?
can’t find any related topic on this but am sure it may have been raised in the past - I have a client with a massive overpayment of benefits because she is deemed to have ‘earned income’ over a period of 2 years for selling her personal possessions on ebay.
admittedly - over the 2 year period she has made around £20,000 but with no regular trade, she sold everything as a private seller as and when she was able to manage as she has a number of health problems.
she basically inherited a lot of possessions which were of no use to her - so she started to sell them online - and has managed to make a healthy profit for herself - which she has actually spent on her debts; however DWP have caught whiff of this due to the number of transactions going through her account thanks to Inland Revenue so she’s found herself at an interview under caution - with no support, and been found to have earnings therefore the overpayment has been raised.
are there any grounds to challenge this?
thanks
zoey
The issue here is whether she is “gainfully employed” as a self-employed earner - anyone who is gainfully employed other than under a contract of service or as an office holder is self-employed by default.
HMRC often have to make the same call for tax and contribution purposes. They have a check list that they call the “badges of trade” - a list of criteria indicating whether the person is trading commercially or selling personal items. There is some good guidance on the “badges” here:
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20205 This summary table contains links to more detailed commentary on all of the “badges”. Really interesting read actually - you can find a lot of good stuff in the HMRC area of gov.uk
In your client’s favour will be the length of time she owned the items before they were sold and the fact that she didn’t buy them; counting against will be the volume and frequency of the transactions and the fact that there was no pride or enjoyment in owning them for their own sake.