HMRC Target On-Line Traders
As of 14th March 2012, HMRC’s new targets in their crackdown on tax evasion are online traders.
The upcoming e-marketplace campaign could affect people selling goods and services or those who run a business through online trading websites such as e-Bay, Amazon or other specialist marketplaces.
According to HMRC 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
HMRC have made it clear that this scheme 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, for example some-one who has an online shop on eBay, Amazon etc.
In their e-marketplace guidelines, which can be found on HMRC’s website, HMRC describe 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.”
There are a number of tests you can take to see if you qualify as a 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.
We advise speaking with a accountant and tax expert before contacting HMRC.
If you would like to discuss this matter further please contact our office for more information.