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Site update
in regards to recent site update:
For stores that are still using PayPal for personal accounts, when a customer views the order, if they haven't marked it as payment submitted, a link is now provided for them to pay for the order.
It is heavily recommended that you stop using this payment method and use PayPal for business accounts instead, as if there is an issue with PayPal, or the customer does not wish to pay, the order will be placed without it being paid for.
To complete the recommendation:
For private sellers (hobbiest sellers) an upgrade to a 'premier' account is good enough, it offers the same advantages as a 'business' account without being considered a business by PP.
For stores that are still using PayPal for personal accounts, when a customer views the order, if they haven't marked it as payment submitted, a link is now provided for them to pay for the order.
It is heavily recommended that you stop using this payment method and use PayPal for business accounts instead, as if there is an issue with PayPal, or the customer does not wish to pay, the order will be placed without it being paid for.
To complete the recommendation:
For private sellers (hobbiest sellers) an upgrade to a 'premier' account is good enough, it offers the same advantages as a 'business' account without being considered a business by PP.
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I once tried to upgrade to a Paypal business account, but they were asking a bunch of business registration information, which doesn't exist because I'm not a registered business (yet).
PayPal keeps trying to get me to upgrade to a business account. I'm not sure what would what the benefit would be (if any).
PP Business account has some advantages - one I recently I took advantage of is PayPal working capital a very inexpensive loan.
Don't be fooled into thinking "they" don't know! If you are reselling for a profit - it ain't a hobby, regardless of how much you sell… ;-0
On the other hand, PayPal does have a legal obligation to report you to the National Crime Agency if they suspect you're engaging in or trying to engage in money laundering. This would be a roundabout way of HMRC getting your PayPal transaction details.
I can't speak for anywhere else but data protection is a big issue in the UK. For example, unless legislation specifically provides for it, or the individual concerned gives informed consent, even government departments are not allowed to share with each other any personal information that they hold, and - curiously - this includes, in some cases, sharing information between different departments within the same organisation. That said, in the days of GCHQ and all the other government scandals, what the law allows and what they actually get up might be considerably different!
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I used to work at HMRC and once fielded a telephone call from a council employee who was chasing someone with a Council Tax debt. I don't remember exactly now but his opening line was something like "I hear that you're looking for a Mrs A and I might have some information if you're open to sharing what you know about her." I knew this to be illegal, possibly even criminal, and I immediately reported it to my line manager. I insisted that the target be notified so that she could contact the ICO to complain.
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Re-selling for a profit does not necessarily mean you are in business. Profit is just one of many indicators that HMRC would look at before deciding if you are self-employed or not. You can sell your own goods for a profit and not be concerned about tax unless your activities fall under the Capital Gains rules. On the flip side, you can make a substantial loss and still be considered to be trading.
The basic rule of thumb if you're based in the UK and selling Lego is this:- if you are buying specifically to re-sell then you are trading and should register as self-employed regardless of whether or not you are making a profit. The sooner you do this the better because if you choose not to, and are later found out, the penalties can be punitive. There are penalties for registering late, failing to file on time, failing to keep adequate records, etc. Your entitlement to some state benefits may also be affected. Furthermore, if you elect to collect VAT but are not actually VAT registered, you may be prosecuted for fraud and end up in jail.
If you are selling part or all of your own personal collection you do not have to inform HMRC - unless (exceptionally) your collection is valuable enough that Capital Gains Tax may be an issue.
I hasten to add that my knowledge of UK tax law is now a couple of years out of date but the above is certainly how it was when I last worked at HMRC. Do not rely on anything I have stated here or elsewhere, always seek professional advice. One thing I would say - be absolutely certain that you have considered whether or not you have to register as self-employed, because you'd be very lucky indeed if HMRC accepted ignorance of the law as an excuse.
OK well let me share this - I am a bi-national (born British but am also a US Citizen) I left the UK in 1991. I returned to England with my family in 2007 - now back in the US.
Whilst in England I adopted LEGO as a hobby, and soon found the best or least expensive way to acquire "a lot of parts" was buying a lot of sets - then sold the minifigs on eBay as I only wanted the parts.
After about 9 months PayPal "locked" my account until I provided them with my (US) social security number… now it gets interesting my PayPal account was completely autonomous from ANY US ties.
Set it up IN the UK, tied to a UK address and a UK bank account - an account that was opened in 1974 - there is no way "they" could have known I was also a US citizen - UNLESS information was shared in a very interesting way.
Like I said they know more than they let on - a bit like the Employee file that is shared with the Employee and the file that the Employee doesn't see.
Data protection is at best a "feel good" measure - my ID was compromised twice in the 6 years we were back in England - the second time I left it compromised so that my ID was worthless.
THAT was down to Barclaycard customer "service" (in India).
Not too mention that every single piece of communication - this included - goes thru the NSA here in the US - and I guarantee this is being looked over due to the keywords used.
and no I am not one of them PCT's (paranoid con-s-piracy theorists) Snowden risked his entire life to enlighten us all…
Just wait 'till obamanet comes into play (it's called "Net Neutrality") - it's anything but "neutral"
add in Facebook, google, amazon and twitter - there are some who have a better idea of what you will likely do in the next hour than you do.
Back in the seventies I thought 1984, Brave New World, Fahrenheit 451 etc were just "good books"
I guess at least around here we don't have cameras EVERYWHERE!!
Graham
In the US they may have completely different requirements about data protection, I know you guys all have to do tax returns no matter what, but that's pretty much all I know
Edit to add: quick check shows prior to 2007, European accounts were held with PayPal UK so wouldn't fall under US jurisdiction. As I said, who knows?
although Hoddie is spot on on euro laws and PayPal, its diffirent in USD.......
If you receive a big som of USD's over a certain amount of time, you will be up for investigation.
This is one of the reasons i dont accept USD anymore
In Holland however, PayPal is seen as a bank, with the same limit of money receiving before needed to mentione it to our government. I dont know the max amount though, and as we are a business our PayPal account is linked to our business bank account, the dutch VAT authorithies can simply see whats happening here.