I asked on the HMRC forum and platform X (in a very limited version):
"Hello,
I would like to ask for clarification regarding the requirements for sole traders when providing identification details to platforms like eBay.
As a sole trader, I registered on eBay as a business around three years ago and provided my Unique Taxpayer Reference (UTR) during the registration process. However, eBay is now requesting my National Insurance Number (NIN) as part of their verification process.
This means that eBay will hold both my UTR and NIN, even though UTR has been my main tax identifier for business purposes.
Could you please clarify:
Should sole traders provide their NIN or UTR to platforms like eBay? Which of these numbers should take precedence in such cases?
If platforms require both numbers, how does HMRC ensure that this will not lead to errors in tax reporting or administrative discrepancies, especially given that UTR has traditionally been used for business-related activities?
I would like to avoid potential issues with my tax filings – or consider not using such platforms further if these requirements cannot be resolved.
Thank you in advance for your help and guidance."
This morning, I received a response from an HMRC moderator (almost identical to the one I received on platform X). It was very short and contained a link:
"Hi,
Please have a look at the guidance at: Selling goods or services on a digital platform - https://www.gov.uk/guidance/selling-goods-or-services-on-a-digital-platform.
This confirms they may ask for your NINO.
Thank you."
I feel like they wanted to get rid of me, as the response was very short and without explanations. They did not answer my questions. I will not ask them anything anymore, because now it is not important. As I mentioned earlier, I am stopping selling on eBay and will return only when I have no money left to put something in my mouth (just a joke).
As the last word on the forum (joke) and on this topic:
I would like to summarize and highlight the unfair treatment of sole traders by eBay in the context of identity verification requirements.
The combination of NIN and UTR is more sensitive than VAT and NIN. The National Insurance Number (NIN) and Unique Taxpayer Reference (UTR) are directly linked to the personal identity and business activities of sole traders. Fraudsters may have more opportunities to misuse this information for illegal purposes, such as credit fraud.
Examples of risks associated with sharing the combination of NIN and UTR:
1) Identity theft: Fraudsters can gain access to bank accounts, take out loans or credit in your name.
2) Tax fraud: They may file false tax returns or intercept your tax refunds.
3) Insurance fraud: They may attempt to use your insurance benefits, such as pensions or medical benefits.
4) Establishing fake companies: They may register fake companies in your name, leading to illegal activities.
5) Fake contracts and obligations: They may enter into fake contracts and obligations, leading to legal and financial disputes.
Other business sellers on eBay can provide only VAT and NIN. The combination of VAT and NIN is less sensitive, as VAT is mainly used in business transactions and is not directly linked to the business activities of sole traders.
The unfairness lies in the fact that sole traders must provide two sensitive numbers, while other sellers can provide only one. This situation puts sole traders at a disadvantage and increases the risk of potential fraud.
I hope that eBay and the relevant authorities will consider these issues and make changes to improve the situation for sole traders.
Thank you for your attention.
P.S. Please don't talk about data security because in today's world, no data is 100% secure. You can only try to protect it. Every firewall can be breached – the question is just how long it will take to break it.
