Tax-collection agency HM Revenue & Customs (HMRC), which is the UK version of the United States’ Internal Revenue Service (IRS), had its legal powers extended last year and is now going after small online sellers. The latest crackdown impacts sellers on eBay, Etsy, Amazon, and Gumtree.
Last year, the Telegraph reported that an online seller in the UK was sentenced to 2 years in jail for failing to pay almost 300,000 pounds worth of tax to HM Revenue and Customs from trades he made on eBay over a period of six years.
Now, the newspaper says there are fresh attempts by HMRC to crack down on tax evasion from online sellers.
The Telegraph said online marketplaces are being forced to hand over customer account data as the agency targets 14,000 suspected evaders.
“Such websites are being forced to hand over customer account details, including their selling activity, as part of the taxman’s legal powers that were extended last year.”
The HMRC provides examples on its website of when an online seller must declare a gain – and when it must register for the UK’s Value Added Tax (VAT).
From reading the examples, it would seem any person who sells online had better keep good records of their costs – see more about that on the AuctionBytes Blog.
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