If you’re one of the many people who make an income from regularly selling goods on eBay or other online auction sites, then be aware that HMRC could soon be looking at you for unpaid tax. A new HMRC campaign was launched in March this year, with the sole purpose of chasing tax on eBay auctions – this means that if you’re a regular seller on auction sites and you haven’t fully disclosed your income to the taxman, they’ll be looking to recover any tax owed, along with added penalties on top. This could spell trouble for active sellers, who may need to get some accounting advice urgently in order to assess their potential liability.
HMRC have outlined the terms that auction site sellers must comply with in order to try and avoid these penalties. If you believe that you owe tax on eBay auctions then you must notify HMRC of your intention to disclose the relevant information by 14th June 2012. Full disclosure and payment of any tax outstanding will then need to be made by 14th September.
HMRC demand auction sites to release information
HMRC aren’t just relying on sellers to disclose any owed tax on eBay auctions either – they have also issued notices to all online auction websites requesting that they supply information regarding their sellers, or face having to pay a penalty themselves. Auction sites are to provide full details of all of their business members, including their registered name and user name, address and postcode, date of registration, email address, company name (where applicable) and telephone numbers. These details will then be used by HMRC to help identify who may owe tax on eBay auctions or other auction sites.
Failure to disclose your tax liability through this kind of trading will not only mean that you have to pay the tax liability, but you’ll also incur penalties plus interest fees too. HMRC are looking at raising a total target of £4 billion through owed tax from this campaign by 5th April 2013.
Accounting advice if you think you may be affected
If you think that you may owe tax on eBay auctions or other online activity, then you need to act straightaway in order to reduce the potential for extra penalty payments. Blue Skies are here to offer accounting advice and help if you think you may be affected by this new HMRC campaign.
Please contact Blue Skies as a matter of urgency in order to get your tax affairs organised – specialist accounting advice is essential if you want to ensure that your liability to HMRC regarding tax on eBay auctions is met.