Tax E-bay

Online marketplace sellers have been alerted to a HMRC clampdown on unpaid tax.

Online marketplace sellers have been alerted to a HMRC clampdown on unpaid tax.

Goods can be sold on the likes of eBay and Etsy up to the value of £1,000 in any one year without paying tax.

But, says RNS Chartered Accountants partner Robert Smith, sales over that should be declared and taxed as such.

“HMRC has launched a campaign targeting income from online marketplaces and we have clients who have received 'nudge' letters,” he said.

“One was selling on eBay as a hobby alongside her employment not realising it triggered a tax liability.”

RNS colleagues are helping her respond to HMRC, preparing the disclosure detailing profit per tax year, along with a calculation of interest and penalties.

“We will wait to see what the response is from HMRC.”

The client's eBay account gave information for the last three years but, after a call to them, they obtained sales information from when she opened her account in 2017.

Robert said: “Most online marketplaces detail seller's information, such as number of sales, so it is in the public domain, but it appears they are working with HMRC to provide information.”

The letters state HMRC has information indicating the recipient has not declared some or all that income on their tax returns.

“If clients receive a letter from HMRC it should not be ignored. Please give your contact at RNS a call and they will support,” said Robert.

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