HMRC to target eBay traders, warns accountants James Cowper

HMRC has this week announced a major new clampdown on individuals who make money from buying and selling items through online trading sites, like eBay. This new clampdown on what HMRC calls ‘tax cheats’ follows similar efforts targeting plumbers, doctors and restaurants announced earlier in the year.

The campaign will see HMRC use the very latest in technology, including a ‘web robot’ that will search the web to pinpoint more accurately people who are trading and have not told HMRC and have failed to pay the right tax.

Mark Herson, a director in the Private Client Tax team at James Cowper said: “This announcement is not aimed at those individuals who only occasionally sell items online. HMRC is seeking those who make a living from online trading and those who supplement their income through significant trading activity. The majority of eBay traders will be unaffected.”

Mark adds: “These announcements from HMRC will undoubtedly trigger a response from people who know or suspect that they have not been paying the correct amounts of tax – and perhaps that is the very reason for the announcement. I would always recommend that individuals who believe they owe tax take advantage of these opportunities to bring their tax affairs up to date.”

James Cowper offers this advice to those who individuals who believe that they may have an outstanding tax liability:

Do not approach HMRC directly without first speaking with your accountant or tax adviser. HMRC are increasingly tough negotiators and without detailed knowledge of the tax system could lead to a larger tax bill and penalty than necessary.
Do not ignore this clampdown. It is possible that HMRC is already aware of your financial details.

Mark Herson, Director, James Cowper LLP +44(0)1865 200500 or email mherson@jamescowper.co.uk

16.06.11