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HMRC are about to look more closely at the tax affairs of people who buy and sell goods on eBay or any other e-marketplace.
As with previous campaigns HMRC will first give people the opportunity to declare and pay the tax they owe with reduced penalties. But if people do not take this opportunity HMRC will use its new powers and interrogation software to hunt down tax evaders and make them pay up.
Limited to traders and businesses
If you just occasionally sell a few personal items on eBay you are not trading so you are unlikely to have underpaid tax from these sales. However if you regularly use eBay to sell goods or services you probably are trading and should be paying tax.
You may find it hard to decide if you are trading or not, but rather than just ignore the issue you should check! To help you do this HMRC has a list of questions which will help you decide www.hmrc.gov.uk/campaigns/emarket.htm and of course you can always speak to us.
Action
If you sells goods or services on an e-marketplace and think you are trading you should prepare to disclose this to HMRC. A formal HMRC facility for doing this will start on 14 March 2012 so you need to act now.
When and how you disclose underpaid tax can significantly impact the penalties you end up paying. To help you get the best outcome please speak to Nicholas Smail on 01452 634800 or email him at nicholas.smail@hazlewoods.co.uk.
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