How the taxman is cracking down on eBay traders
The taxman is to launch a series of new campaigns to tackle tax avoidance, which will include heavy traders on sites like eBay and Amazon. Will it affect you?
People frequently buying and selling goods online are to be targeted in the latest campaign by HM Revenue and Customs (HMRC).
If you are only selling a few items irregularly you do not need to worry. However, buying and selling in large quantities may alert the taxman.
Private tutors and tradesmen are also now in the sights of HMRC, following a series of tax amnesties. Over the past couple of years the taxman has been making special efforts to get plumbers and doctors, and more recently restaurateurs, to come clean and pay the right tax.
The drive is aimed at raising £7 billion for the government during the current parliament by tackling tax avoidance, evasion and fraud.
How the taxman will be hunting
Over the past decade the popularity of online marketplaces such as eBay has risen with a growing number of people increasing their income by selling goods online.
HMRC have confirmed they will be using 'cutting-edge tools' including a 'web robot' to search the internet and find targeted information about specified people and companies.
Only recently, HMRC launched 16 criminal investigations off the back of an earlier campaign, which highlights that the taxman is pursuing suspected tax evaders.
The key issue will be in distinguishing between an e-trader - someone who buys goods specifically with the intention of selling them at a profit online - and an individual selling a few unwanted belongings, which would usually be sold infrequently and at less than the original cost.
The taxman sees trading online as no different from owning a physical shop, so you will need to pay tax. While occasional sellers are unlikely to be liable to tax, people earning a living as self-employed traders may need to speak to an accountant about paying income tax, national insurance and VAT.
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