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HMRC targeting online traders

By December 12, 2014January 9th, 2020No Comments

HM Revenue and Customs (HMRC) launched their e-marketplace campaign on March 14th 2012…

HMRC’s new targets in their crackdown on tax evasion are online traders.

The upcoming e-marketplace campaign will affect people selling goods and services or those who run a business through online trading websites such as e-Bay, eBid, CQ Out, One Way UK, Flogitall, Specialist Auctions and Amazon. HMRC’s website states that the “e-marketplace campaign is for people who are trading online to sell goods and services as a trade or as a business but aren’t paying the right amount of tax.”

The e-marketplace campaign starts on 14 March; more information will then become available. HMRC have made it clear that the e-marketplace is not targeted at people who occasionally sell their personal items on online trading and auction websites, it is only for those who trade goods online, e.g. someone who has an online shop on eBay, Amazon etc.

In their e-marketplace guidelines, which can be found on HMRC’s website, HMRC describes an e-marketplace as “an online market, or online shop, where buyers and sellers trade with each other over the internet.” And that;

“A separate company, a ‘3rd party’, runs most e-marketplace websites. They let you advertise or auction your goods or services on their website, and usually charge you a fee for this service – either for using their site, the amount you sell your goods or services for, or both.”

How to work out if you are an online trader

    • Do you regularly sell goods and services online?
    • Do you buy products to re-sell online and make a profit?
    • Have you registered as a shop with an online auction site?
    • Do you sell the same type of items/products?
    • Have you borrowed money for the goods you’re selling?
    • Do you make items and sell them for more than they cost to make?
    • Do you change the things you’re selling to make more profit?

If you answered yes to any of the questions above then you should be registered with HMRC to pay tax. KinsellaTax advises speaking with a tax expert before contacting HMRC.

Kevin Kinsella Jnr, of KinsellaTax, said:

“This is surely aimed at people who are making a living out of eBay or any other online marketplace. In the normal run of things I would have thought that most people would have made their returns in the normal way, no doubt there will be people effectively dealing in the “black money markets” who will fall foul of HMRC.

“If you are trading through an online shop I would advise submitting a statement to HMRC. We have recently submitted the disclosure report for a client who was trading online, this amounted almost £400,000 in indirect and direct tax liability.”

If you are an online trader and think that you may not have been paying the right amount of tax, now is the time to speak to a tax investigation professional who can sort out your tax affairs for you.

KinsellaTax’s staff consist of ex-HM Inspector of Taxes and ex-HM Custom and Excise Officers.

If you would like more information on HMRC’s e-marketplace campaign or would like to get your tax affairs up to date our team of tax professionals can help by calling 0800 471 4546 or click here to fill in an online form.