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.
Please note that articles on MSN Money do not constitute regulated financial advice, which recommends a course of action based upon the specifics of your personal circumstances. The articles are intended to provide general personal financial information. We urge you to consult an Independent Financial Adviser (IFA) before making any important decisions about your finances. You can search for an IFA in your local area. Any statement regarding financial services products and tax liability is based on legislation and tax practices as at 6 April 2011, which is, of course, subject to change. The value of any tax benefits or reliefs depends upon the individual circumstances of the investor. When investment performance is mentioned you should remember that past performance is no guarantee of future performance. Where products have an underlying investment content, in many cases the value of the investment can fall as well as rise. For with-profit based investments, there is no guarantee as to the level of bonuses that will be declared, if any. Where mortgages or secured loans are explained do remember that your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. All mortgages are subject to underwriting, status and are not available to people under the age of 18.
New research has found that families are spending an average of £180 on back-to-school supplies for their kids. Does this tally with your experience?
Thanks for being one of the first people to vote. Results will be available soon. Check for results
- Yes, that sounds about right to me
- Yes, but I think school supplies are getting more expensive every year
- No, the cost of new uniforms, stationery and sports kit takes us well past the £200 mark
- No, I wouldn’t spend anything like that amount on the little horrors!