HMRC has recently announced a number of industry specific crackdowns including people or businesses trading on eBay. Let’s make it clear, this is not about the occasional sale of the odd unwanted item on eBay, but individuals who are regularly making sales on eBay with an intention to make a profit. If you are regularly trading on eBay as an individual and using it as a business activity, then you are liable for income tax payments on any profits you make and potentially VAT payments as well. If your turnover (total sales) from selling on eBay is over £73,000 for the last 12 months (2011 VAT threshold) then you must register for VAT. Even if your turnover is below this limit, you should register with HMRC as a sole trader if you are conducting a business activity over eBay.
HMRC has developed a “web robot” intended to catch people who have differences between their stated financial position and their lifestyle which may identify people underdeclaring their income. HMRC is actively inviting people who should have registered but haven’t to come forward in a so-called amnesty to mitigate hefty penalties. Those who fail to come forward could face prosecution. If you are unsure whether or not you should have registered with HMRC, speak to an accountant.
Did you realise that trading on eBay could be classed as a business activity? Do you think there are other areas of hte business world that HMRC could target next, for example income from blogging activities, other “new style” business ventures where individual may not actually realise their tax liabilities?
If you would like any advice in this area or any other areas of accounting or tax, please contact me on 01767 260282 or amy@tayloraccountancy.net, www.tayloraccountancy.net.
Amy Taylor Accountancy takes every care in preparing material to ensure that the content is accurate and up to date. However no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Amy Taylor Accountancy You should always ask your accountant to give you specific advice which is tailored to your personal and business circumstances and properly implemented.
