eBay trader found guilty of undeclared self-employed income

12th September 2014

HM Revenue and Customs (HMRC) has warned its tax clampdown on online traders is still proving dividends after recently jailing an online retailer for failing to declare six years’ worth of income from selling on eBay.
Although HMRC officially wound down its e-Marketplaces campaign back in 2012 it is still bearing fruit after the recent two-year jail sentence for a Manchester-based eBay trader who turned over £1.4 million in six years but did not declare a penny.
John Woolfenden, of Radcliffe, Manchester, also failed to register for VAT or pay any owed VAT on his commercial e-trading.
HMRC foiled his tax evasion last year when the e-Marketplace initiative discovered the unpaid taxes, interest and money laundering totalling almost £300,000.
After tax officials challenged Mr Woolfenden for details of his trading, evidenced by more than half-a-million eBay listings, the 52-year-old opted to ignore their advances entirely.
HMRC raided his home last May and found vast amounts of DVDs, CDs and games “stacked to the ceiling” – all the hallmarks of an online retailer.
Its forensic accounts team eventually found that payments of almost £1.4 million had passed through Mr Woolfenden’s online bank accounts throughout a six-year trading period.
Mr Woolfenden pleaded guilty to charges dating between 2006-2013, but HMRC found adverts for ‘Globalworldentertainments’ – Mr Woolfenden’s trade name – stating the business had been about for more than two decades.
Sandra Smith, of HMRC, said: “Woolfenden did not declare his true income on his self-assessment tax return … [but] he stole a substantial sum of money purely to line his own pockets.”
HMRC issued a further warning to self-employed traders working online, saying: “HMRC is continuing to use the data gathered during the [e-Marketplaces] campaign to identify people who should have come forward but chose not to.”

Image: Kenneth Lu

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