An interesting article in The Guardian on May 19th (got a bit behind and only found it today!)… It seems that HMRC (Her Majesty’s Revenue & Customs – the UK’s taxman) is starting to look in more detail at online auction activity. According to this article, tax inspectors will be trawling through many thousands of online auction sales and looking for any UK eBay sellers who are especially busy. They will then investigate whether these sellers should be classed as traders or not.
The article provides a detailed set of examples explaining who qualifies as a trader and who does not, but in essence it depends whether you are buying to sell or whether you are simply selling surplus possessions. Capital Gains Tax can also come into play on larger sales.
The article is here and is well worth a read for anyone who trades on eBay.