HMRC chase smaller online seller’s unpaid tax
The Telegraph reports that not only are HMRC chasing more online sellers to ensure that they’re paying the correct tax, but that they are also actively looking for a high profile offender who’s failed to declare their income to make an example of.
It’s not just eBay, although that’s probably the most popular site for online sellers due to the ease of getting started, but also Amazon, Etsy and Gumtree sellers are under the spotlight.
The Telegraph reports seeing a letter sent to an eBay seller saying “HMRC receives information about fees paid by you from the e‑marketplaces you use and is aware you were registered as a business seller. HMRC thinks you should have declared more on your tax returns than you did“. In other words they already know your rough turnover from your eBay fess and if you’ve not declared what they consider a reasonable turnover, expenses and profits they’re chasing your heels.
It doesn’t matter how little profit you made, even if it’s only £100 a year you must declare it. In fact if after expenses you made a loss you might even be able to offset the loss against taxes paid from other sources such as a regular salary!
If of course you’ve registered as a business seller than it’s pretty obvious you’re trading and need to declare your income and expenses. If you don’t it’s simply asking for an investigation by HMRC and they could force you to pay up what they estimate you owe until you correctly complete your tax returns, plus of course anything up to £1600 per year in fines for late submission.
If you, or someone you know, thinks that they’ve some income that they should have declared, it’s much better to give HMRC a call and fess up before they come calling. They’ll still want the tax paid, but they’ll look on your case a lot more favourably if you go to them than if you wait until they catch you.