HMRC Investigation with the Tax Man | Business Seller Board

kaykay1231 · 2026-04-21T19:12:08.051000Z

Guys, Its been quite a terrible couple of years! Yes, the HMRC "Notice of Enquiry" letter dropped through my letter box in September 2023 - regarding my eBay sales! First off, I am not here for a lambasting "you should have paid your taxes" "Shame on you" - I've been punished hard enough. Believe me HMRC are brutal....My health has suffered, I have PTSD (I'm not even joking), I also lost my job as I was literally unable to function properly. Did I over react? I don't think so, my accountant advised that people have "ended themselves" over similar matters.... The envelope - Brown, A4 in size and unknown to me at the time - the beginning of a 30 month battle. So, the first letter arrived September 2023 - a "Notice of Enquiry" into my 2021-2022 tax return. HRMC wanted to know: A reconciliation of how I arrived at the turnover figures of £xxx for online salesDo you sell on eBay? If so, please provide your eBay statements for the relevant periodA reconciliation of how you arrived at the figure of expenditure amounting to £xxxThe relevant invoices to support the expensesAll bank statements, credit card statements, building society statements, pass books, for any account which has been used or drawn from the businessPlease confirm if you have received any income in the tax year that has not been included on the return. I had 3 weeks to return this information to HMRC. I knew instantly I had an immediate problem because I had stupidly sold some personal item on my business account, which I had not accounted for on my self assessment and I think this is where any discrepancy came from which they knew about. Anyway, it was an ordeal getting the information together - the stress was immense. I told HMRC that there were some sales which had been omitted from my self assessment as they were personal and their next letter back to me (after I had sent them everything they has asked for), was to see a list of the omitted items. I duly sent this to them, waited , and then heard back that they did not consider the omitted items as personal items as they were "new with tags"....I didn't have the energy too argue. It was at this point, I started to panic - I knew deep down I had larger issues. A long history of selling on eBay, with very few tax returns completed over those years. I know - stupid! Hands up, it was wrong but it honestly just started off as a hobby and I really didn't give it much consideration. I needed help fast, so contacted an accountant that specialises in dealing with these types of cases. He advised that once HMRC have their claws into you, its very difficult to stop the train, and they can go back 20 years. My safest option at that point was to control the situation and do a voluntary disclosure to HMRC. In order to make the voluntary disclosure, I had to sign forms where I admitted "tax fraud", and they agreed to look into my case as a civil issue as long as I disclosed everything, and if they found further discrepancies then they would look to pursue criminal proceedings. This in itself is terrifying! This process with HMRC and my accountant was long - From January 2024 through to April 2026. I had to do an outline disclosure where I gave a full account of my wrongdoings. This has to be 100% correct as HMRC know more than you think they know, so accuracy is key if you want them to accept and pursue only as a civil matter and then finally submit a full disclosure with a final tax figure owed. The full disclosure was carefully managed by my accountant, he had to pick through 20 years of bank statements, PayPal accounts, shares, bank interest etc. I had to account for every single transaction in and out of my bank accounts, they were not just looking at this point for eBay sales, but everything to do with transfers between myself and husband, any cheques which I received even going back 16/17/18 years had to be accounted for in case it was from sale of goods, where did I get deposits for Mortgages etc. I had to account for any cash received into my bank accounts - it was immense. The pressure was real! I was sick to my stomach most days...It was a very hard time. To top this off my accountant was charging £300/hour. The £££ were stacking up. A lot of back and forth, signing documents, providing eBay account ID's even for closed accounts, all PayPal data which was possible to obtain (yes, 7 years on that), eBay sales data, 20 years of bank statement.... Nightmare and Vinted...the drama went on and on. Once the full disclosure was submitted, things were now in the hands of the Fraud Investigation team at HMRC and I waited for queries to come off the back of the full disclosure. Nothing much materialised from that but there was a query on whether I should have paid capital gains on the sale of a flat, so I can assure you they will look under every stone imaginable to find money. We finally agreed on a tax payable figure with HMRC earlier this year. The tax owed amount spanning 20 years was approx., £15,000 - now you have to understand I was a 40% tax payer in my PAYE job so I was paying 40% tax on all eBay sales.Interest was cumulative, and worked out about £4000, and I paid approx. £7000 in penalties. In total approx. £26,000.... They gave me 30 days to pay! I will also say here, that going back 20 years I did legitimately sell a lot of personal item in that time, but there was absolutely no way of being able to prove that as detailed PayPal data only goes back 7 years - so I ended up paying tax on absolutely everything. Anyway, my ordeal is over. My shoulders are lighter now and I can enjoy things again without any dark cloud. My tax record is also squeaky clean....how many people can say that! Like I said early, please no criticism, I've been through enough, writing this has been cathartic. Hopefully this will be interesting to some of you!

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HMRC Investigation with the Tax Man | Business Seller Board | eBay UK