There are also problems by the fact that registered businesses are tied to the rules and regulations of four important Fair Trading acts.

The Sale of Goods Act 1979 – this makes sellers responsible for ensuring
that the item is as described, of satisfactory
quality and fit for the purpose it is sold for.

The Trades Description Act 1968 – which makes it illegal to make a false
description of an item or to supply or sell
an item for which such a description has
been made.
The Consumer Protection (Distant Selling) Regulations 2000
This requires sellers to provide clear
information about themselves and their
products. (This can be done using the “About
Me” page)
Allow people 7 working days in which to
Cancel the purchase “Cooling off period”
Electronic Commerce (EC Directive) Regulation 2000
This requires the seller to provide the
following:
Name, address and e-mail address of business
Details of membership to any trade
Organisation.
If applicable the sellers VAT number.

By buying from registered businesses buyers will know they are protected by these regulations whereas if they buy from an individual they do not get the same degree of protection.

If you are registered for VAT, (compulsory if you have a turnover of £60,000 per year or more) your eBay fees are Vat inclusive, which means that you will
get the 17.5% saving as a VAT registered Business Seller.

So how can you define a business or private seller? EBay suggest that if you are in doubt you should contact your local Revenue office but basically you are a business if you use eBay to sell any of the following:
1. Items you have bought specifically to resell
2. Items that you have produced yourself specifically to sell
3. Sell a high amount of goods on a regular basis.
4. Often sell items that you have not acquired for your personal use.
5. act as a trading assistant.
6. Buy items from eBay for your business.(So that you can claim tax relief on the purchases)

You do not need to register for a business identification if you:

1. Sell items belonging to you that you do not need anymore
2. Buy items for your personal use.

EBay have identified 3 benefits from registering as a business:

1. The saving of VAT on eBay charges (if registered)
2. You can be included in eBay business –related communications
3. Because most businesses already meet all the legal requirements
this allows customers to know who they are.

The onus of registering, as a business, is entirely in your hands. If you have already given eBay your VAT details you will automatically become registered. EBay fees for both private and business sellers will remain the same. Interestingly eBay have said that if you both use eBay for business and private buying and selling that you can set up separate accounts for these two functions, one private and one business.

It is possible to become a Power Seller with sales of under £10,000 per year but I suspect you might have a problem persuading the Inland Revenue that you were not operating a business if you held that accolade.

Some sellers would for their own reasons prefer not to let customers know that they are a business. However, you cannot opt out of having the “Registered as a business seller” shown in your members profile.

As we have reported before both the Inland Revenue and HM Customs and Excise(VAT department) seemed to have been showing a great deal of interest in the selling activity on eBay of late. The introduction of the business identification I am sure is a move by the company to head off any threat of any compulsory legislation.

Many established businesses will welcome this move because it does level the playing field to some extent. But what the long-term effect for the average part time seller remains to be seen.

If you have any further questions eBay will hold a workshop on Wed 28 Sept from 10.30 -12.00 to answer your questions.
See http://forums.ebay.co.uk/thread.jspa?threadID=200243795&tstart=0&mod=1127392002322 for further details.

Disclaimer: This article is written for general information and no legal qualification or experiince are claimed. If you have any questions or queries relating to the legal points raised in this article you should consult your own legal advisor.