People who sell goods or services online are being targeting by the UK tax authority as it attempts to tighten the screws against tax evasion.
HMRC is looking not just at eBay, but also other sites such as Etsy, Amazon, and Gumtree.
A number of websites are being obliged to disclose customer account details, including selling activity.
Under far reaching new powers introduced last year, HMRC can download people’s account information and even force sellers to pay tax that is disputed or subject to an inquiry.
The Revenue has already sent 14,000 letters to traders suspected of running a business but not declaring it on their tax returns.
Any earnings above an individual’s tax-free personal allowance – £10,600 for the 2015‑16 tax year – are taxable if the money made is considered a business profit.
The previous campaign which ended in 2012 enabled HMRC to raise more than £9 million in tax from sellers. One man who operated a DVD and games business on eBay was sentenced to two years in prison for failing to pay near £300,000.
At the time, sellers were warned that some hobbies might be classified as “trade”, and subject to tax. If HMRC thinks the intent is to make money, rather than selling items for fun, the selling activity is considered to be a business.
If people do not respond to the HMRC letter, it will make its own calculations on tax it considers due and demand that it is paid sometimes immediately or other times within three months.
