Buying stuff from my employer [via ebay] and selling it on at a profit.

HMRC regard this as trading and as such taxable. This applies whether or not you buy from your employer or just other 3rd parties including buying from Charity shops and re-selling on auction sites..

There is legislation re connected persons which may affect both you and your employer but without specifics I could not comment.

I would say that if you are buying it at the same price as Jo Public (and keep evidence to support this), there shouldn't be an issue on the employer/employee front.

I agree with the first poster that if you are buying to sell on at a profit then you are trading and will need to advise HMRC that you are self-employed and submit accounts etc.

I agree with the previous posters, there can be no BIK considerations where you're acquiring goods at their market value (and Ebay's a market).

On the trading point though, there is a (non-specific) point of activity below which HMRC will be prepared to accept that you're not trading, otherwise they run the risk of having to give relief for hobby losses.  As the first repsondent says though, HMRC have published guidance on this.

They then become chattels, the sale of which is not taxable.

the intention at the outset was to buy and sell at a profit. To insert the "use it a couple of times" step on a regular basis is setting yourself up for a fall

Could someone point me to the HMRC guides referred to ..ie trading/hobby, one-off events etc?

Many thanks in advance.

Similar enquiries with HMRC many years ago resulted in the following advice from HMRC:

Is the hobby profitable?  If yes, then the profits should be declared as income. If no, then it is a hobby and you cannot declare it as a trade to obtain tax relief against other income.

The difficulty arises where a hobby has made losses for years, then becomes profitable. Of course, not everyone keeps adequate records when it is a genuine hobby that happens to become profitable.

Knitting, stamp-collecting, trainspotting etc etc etc - all hobbies. This is the first time I've come across the hobby of acquiring goods from one's employer.

If I were, say, a motor-cycle collector, and my employer was in the business of selling M/C parts, there probably wouldn't be too much of an issue in acquring redundant goods - and then selling them on if surplus to requirements. But I would have thought that in the majority of cases an employee can be buying bits and pieces from his employer for one reason only. (How many people collect pallet trucks as a hobby?)

On another point altogether, the employer says he will sell for whatever eBay fetches - I don't understand. Is he saying that once the auction is closed he will then sell to employee for the highest bid amount and stuff the potential eBay buyer? Not a particularly good way to achieve high-rating on eBay, and eventually self-defeating. Ratings would quickly decline to the extent that there will be few bidders, and even those few making low bids.

PC

As PC alludes, buying a pallet truck on ebay, whoever the seller happens to be, instantly suggests that you have already formed the intention of reselling (unless you happen to be someone that has a pressing need for a pallet truck).

The guidance you seek is at http://www.hmrc.gov.uk/guidance/selling/index.htm.

If you're going to buy and sell a lot of pallet trucks, you should probably also consider registering for VAT! :)

Some interesting guidance has been offered on ebay protocol as well! :)

I'm not intending to make this a regular occurence or give up my day-job to do it full time.

We're talking about one or possibly two items a year - market price set by looking at previous sales prices on ebay, or alternatively bunging it in Loot for best offers. So a fair market price is identified.

They are happy to let me have it at the same [fair open market] price. 

I sell it at more than I pay for it. 

It seems to me difficult for HMRC to claim this is 'self-employment', since it is a one-off?

Alternatively if they say it is 'trading/self-employment', then surely they are opening the door for me to claim a whole shed-load of expenses for the rest of my 'hobby' losses - such that I make a loss overall???

In fact their own guidance warns against allowing lots of losses just because a hobby has a one-off profit [on the grounds the one-off is 'possibly contrived'].

So is it just the one-off profitable bits of buying/selling stuff that they want to allow [excuse the sarcasm]??

...my wife doesn't work, so could I employ her as my PA/secretary/dogsbody [for my s/e/hobby 'business'], and pay her a salary equal to the profit [about £1000], thereby using her personal allowance, and negating the profit??

No. Well, perhaps. If you think that your wife has to do enough work in respect of a single sale to justify being paid £1,000 for her input, go ahead. But I suspect that salary rate might not meet with HMRC approval.

Let's be clear here - there is a huge difference between buying bits and pieces for one's hobby and then selling on - at a profit or otherwise - and acquiring stuff with the sole intention of selling on at a profit. As noted above, a single transaction can amount to one of trade. In reality, I doubt very much if HMRC would pay the slightest bit of attention unless the tax involved were significant (but don't ask what 'significant' means in this context). I know that HMRC used to have people who monitored eBay and other auction sites for multiple sales by the same members in order to determine whether there was trading. Knowing how stretched their resources are, I'm not sure that they pay as much attention as they used to. If your name were to pop up only once or twice a year, probably safe to say you'd go unnoticed. But you also have to consider the knock-on impact of an enquiry into your employer's affairs, should it be discovered that the equipment etc had been sold to you. Quite possible that no immediate issue if sold to you at MV, but if they decided to follow the trail further .....

You may not like the answers you have been given, or necessarily agree with them. But you did ask, and have been given the correct answers. Ignore them at your own risk.

PC

If your wife has no income at all, why not have her purchase and sell the goods instead of you? This avoids the possibility of HMRC denying deduction for an excessive salary and should HMRC successfully argue that it amounts to a trade the estimated profits of £1000 will easily be covered by her allowance.