HMRC Target Online Traders
HMRC are continuing with their ‘Grab for Cash’ campaign, and have now turned their attention to online traders.
HMRC will be using state-of-the-art technology such as “web robots” to search the internet and find focused information about specific individuals and businesses.
In conjunction with HMRC’s own computer system, this new software will accelerate and revolutionise HMRC’s identification of tax evasion, by matching up HMRC’s data with that of third parties. It will therefore allow them to quickly and more accurately identify individuals failing to declare they are trading and therefore, failing to pay the correct amount of tax.
What will this mean for small businesses and UK taxpayers?
This current campaign will focus on regular traders on eBay, Auto Trader, E-auctions, Amazon and Gumtree.
If you are simply selling your unwanted, personal belongings online, it is unlikely you will need to declare the sales on your tax return. However, you should consider these points and if you can answer “yes” to any, we recommend you seek advice from your local TaxAssist Accountant:
1. Buy goods, with a view to then sell them online
2. Make goods, with a view to sell them online at a profit
3. Sell goods on behalf of others, on commission
4. Sell a service and get paid for it
Sales to friends and family and cash sales are also relevant. And if any of the above does apply and you already have a trade that is VAT registered, the online sales could also be subject to VAT.
Mike Wells, HMRC’s Director of Risk and Intelligence, said:
“We will use the information we gather to pursue people who choose not to use the opportunities we provide for them to put their affairs in order on the best possible terms. It will be more expensive if we come and find people, so I urge them to come forward and disclose voluntarily.”
HMRC continue to have the more traditional Tax Evasion hotline too, which allows people to tip-off HMRC when they believe an individual or business is avoiding tax
The tax policies of these e-market sites are very well hidden, and if you do manage to find it, you will normally find they complete absolve themselves of any responsibility to the local tax authority. The income declaration and the tax position are entirely in the hands of the seller. So sellers cannot rely upon the e-market sites to come to the rescue when dealing with HMRC or any other local authority, and nor can they use ignorance as an excuse.
Previous campaigns have targeted offshore investments, medical professionals and people working in the plumbing industry- the so-called ‘Plumbers’ amnesty’. Over the next year, HMRC are also due to target those who provide private tuition and coaching, and following on from the Plumbers’ amnesty, traders who fail to declare their income and unpaid tax.
Posted by Jacob Williams
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