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Community Member
Posts: 7,330
Registered: ‎04-09-2011

Online sellers and HMRC

Found on the internet:

 

An analysis of recent fines against online retailers for unpaid tax amongst what HMRC calls ‘deliberate defaulters’ found they faced penalties, on average, of 59% of the tax owed (payable on top of the underpaid tax). This compares with a normal penalty of around 35%-50% of the tax owed.

 

Examples include an online car accessory retailer from Bradford who defaulted on tax worth £71,738 between 2011 and 2014, and faced penalties worth £50,217, or 70% of tax owed. 

 

In another case an online textile retailer from Manchester who defaulted taxes worth £62,702, faced penalties of £35,113, or 56% of tax owed, while an online sole trader antique dealer from London who defaulted on tax worth £26,399 and faced penalties of £17,555 was charged 66% of tax owed.

 

There was also an online retailer of mobile phone accessories from Leicester who defaulted on tax worth £31,418 and owed penalties of £20,343, or 65% of tax owed, and an online retailer from Glasgow whose tax defaults totalled £34,176 and who faces penalties of £20,335, or 59% of tax owed.

 

Many small scale and individual online retailers using outlets such as eBay, may be unaware they have to pay tax on their online trading, or believe that their earnings are so small they will fall under HMRC’s radar. However, the recent spate of heavy fines show how HMRC is no longer cutting internet traders of goods any slack. From April 2017, online retailers are allowed to earn up to £1,000 annually without being taxed, but many are rapidly outgrowing that exemption.

 

In HMRC’s eyes there can be no excuses for not declaring online businesses – HMRC are cracking down on them with full force. However, many sellers might not consider the fact they should be paying tax and are not even registered with HMRC.

 

HMRC obtains data from companies who process debit and credit card transactions, making it relatively easy to track down those that are underpaying tax.

 

 

 

Community Member
Posts: 651
Registered: ‎08-10-2010

Re: Online sellers and HMRC

in reply to papso22

Might be worth posting this on the Private Sellers Board

Community Member
Posts: 7,330
Registered: ‎04-09-2011

Re: Online sellers and HMRC

[ Edited ]
in reply to kidmore_kats

Good idea but they might take it the wrong way and turn on me! Woman Wink

Community Member
Posts: 793
Registered: ‎11-11-2010

Re: Online sellers and HMRC

in reply to papso22

 

HMRC obtains data from companies who process debit and credit card transactions, making it relatively easy to track down those that are underpaying tax.

 


 

If HMRC is relying on data from credit card companies, rather than going straight to Ebay and others of its ilk and asking for a list of every seller - business or private - with transactions worth over, say, £83,000 a year, then I'm not surprised that HMRC is getting so little income in penalty fees and unpaid tax.

Community Member
Posts: 252
Registered: ‎12-11-2007

Re: Online sellers and HMRC

[ Edited ]
in reply to papso22

Probably easier than going after Amazon,Starbucks, Google and of course Ebay itself who coincidentally paid just £1.1m in tax in the UK last year, despite telling US investors that Britain was its second largest market, generating revenues of $1.4bn (£1.1bn).

Community Member
Posts: 5,281
Registered: ‎29-01-2007

Re: Online sellers and HMRC

[ Edited ]
in reply to papso22

Good idea but they might take it the wrong way and turn on me!

 

Would you like me to do it then, I am used to a good kicking now and again.....................Smiley Happy

.................................................................................

Retired
Community Member
Posts: 3,812
Registered: ‎26-06-2009

Re: Online sellers and HMRC

in reply to papso22

Sounds like a bit of a scare story to me. Like those ineffectual ads they put up on billboards a few years back. We all see masses of URBs every day and no sign of any 'crackdown'.

Community Member
Posts: 7,330
Registered: ‎04-09-2011

Re: Online sellers and HMRC

in reply to designer_label_girl

designer_label_girl wrote:

 

HMRC obtains data from companies who process debit and credit card transactions, making it relatively easy to track down those that are underpaying tax.

 


 

If HMRC is relying on data from credit card companies, rather than going straight to Ebay and others of its ilk and asking for a list of every seller - business or private - with transactions worth over, say, £83,000 a year, then I'm not surprised that HMRC is getting so little income in penalty fees and unpaid tax.


I understand from other articles that they do have access to eBay and PayPal information.  There has also been a massive increase in 'chinese' sellers registering for vat since HMRC put pressure on the online sites.

Community Member
Posts: 252
Registered: ‎12-11-2007

Re: Online sellers and HMRC

[ Edited ]
in reply to papso22

It's probably the result of new laws giving HMRC power to get personal information from banks and auctions sites such as ebay. Supposedly introduced to prevent money laundering and recoup tax loss but more likely another step by our government to snoop further into our private lives and (later?) perhaps sell our data to third parties.

 

There's a bit here which may provide further information:-

 

http://www.thisismoney.co.uk/money/news/article-4107122/How-taxman-spies-buy-sell-online-thanks-new-...

 

 

Community Member
Posts: 7,330
Registered: ‎04-09-2011

Re: Online sellers and HMRC

in reply to plasticpiggie

It seems the tax man can't win! Either they are not doing enough to clampdown on people who are not paying the right amount of tax, or they are accused of snooping when given the tools to do just that.  

Community Member
Posts: 1,159
Registered: ‎02-02-2009

Re: Online sellers and HMRC

in reply to kidmore_kats

kidmore_kats wrote:

Might be worth posting this on the Private Sellers Board


why not also the business sellers board. i often wonder how many registered ebay business don't pay their full tax.

 

when hmrc first published their name and shame lists they were all business fiddling their taxes.

Community Member
Posts: 2,797
Registered: ‎01-01-2007

Re: Online sellers and HMRC

in reply to papso22

"It seems the tax man can't win! Either they are not doing enough to clampdown on people who are not paying the right amount of tax, or they are accused of snooping when given the tools to do just that.  "

 

They don't really do themselves any favours, publicity wise, though!

 

There are companies, and individuals, "avoiding" tax in the millions - the tax man does "sweet deals", gives them breaks the ordinary punter could only dream of, and then releases statements of how they are hounding people who owe, in comparison, peanuts!

 

Yes, everyone should pay their tax, but if the tax man lets millions go, and spends millions chasing thousands, you have to wonder if this is about money - or control?

 

If people owe you money, would you really chase the guy who owes you a quid and not worry about the £10,000 the other guy owes?

Community Member
Posts: 852
Registered: ‎02-02-2015

Re: Online sellers and HMRC

in reply to papso22

These sellers deserve what they get.

 

Not just for tax evasion, but the fact that they deny buyers the rights they would be entitled to from a genuine business seller.

 

Additionally, they gain advantages which genuine business sellers would have to pay for.

 

They know exactly what they are doing, and it's time that some examples were made.

 

What makes it even worse is that some even blatantly state their "business plan" in their descriptions!

Community Member
Posts: 252
Registered: ‎12-11-2007

Re: Online sellers and HMRC

in reply to papso22

I'm sure the clever software can do more than they need... like provide a pen picture of your lifestyle and spending habits. Nothing to prevent them selling that on to third parties and then bombard people with adverts.

 

Most of all it is PERSONAL DATA or perhaps that is too hard for you to understand.

Community Member
Posts: 252
Registered: ‎12-11-2007

Re: Online sellers and HMRC

[ Edited ]
in reply to puddin_lai

The strategy seems to be to go after small UK sellers but ignore Chinese sellers importing huge container loads of goods supposedly to 'store', but who then sell them on ebay without paying the VAT. They will not tackle tthe problem at source for fear of being labelled 'racist' but surely that would not only help solve the problem of tax evasion, but also curb the number of counterfeit and dangerous good entering the country.

 

This article rambles on about going after ebay for VAT fraud, but of course we all know it's easier to chase Mrs. Jones selling her old TV.

 

https://www.theguardian.com/politics/2015/dec/22/tax-officials-investigate-amazon-ebay-vat-fraud-ove...

Community Member
Posts: 7,330
Registered: ‎04-09-2011

Re: Online sellers and HMRC

in reply to plasticpiggie

plasticpiggie wrote:

I'm sure the clever software can do more than they need... like provide a pen picture of your lifestyle and spending habits. Nothing to prevent them selling that on to third parties and then bombard people with adverts.

 

Most of all it is PERSONAL DATA or perhaps that is too hard for you to understand.


I think you will find that there are laws to prevent them selling on your personal data, but you clearly have something against HMRC, or have inside information not available to others.

 

And there was no need for your final comment at all.

 

  

Community Member
Posts: 7,330
Registered: ‎04-09-2011

Re: Online sellers and HMRC

in reply to plasticpiggie

plasticpiggie wrote:

The strategy seems to be to go after small UK sellers but ignore Chinese sellers importing huge container loads of goods supposedly to 'store', but who then sell them on ebay without paying the VAT. They will not tackle tthe problem at source for fear of being labelled 'racist' but surely that would not only help solve the problem of tax evasion, but also curb the number of counterfeit and dangerous good entering the country.

 

This article rambles on about going after ebay for VAT fraud, but of course we all know it's easier to chase Mrs. Jones selling her old TV.

 

https://www.theguardian.com/politics/2015/dec/22/tax-officials-investigate-amazon-ebay-vat-fraud-ove...


And your evidence for this is what exactly?

Community Member
Posts: 252
Registered: ‎12-11-2007

Re: Online sellers and HMRC

[ Edited ]
in reply to papso22

The laws protecting personal data have been eroded away over the past few years.... have you not noticed? Have a look at the 'Investigatory Powers Bill' for starters. First it was telephone calls, emails and internet browsing history; now your bank account details and other financial transactions are no longer private. As if that is not enough, NHS hospital records have been sold to insurance companies so you are incorrect to say there are laws to protect our private data.

 

The previous boss of HMRC Dave Harnett persecuted small taxpayers whilst striking deals with tax-avoiding corporations. He did nothing to investigate the HSBC banking scandal and after leaving HMRC, went to work for that bank. Institutions that are rotten at the top are usually rotten further down. HMRC use laws designed to prevent terrorism for their own purposes. You are quite correct in that I don't like them in any way.

Community Member
Posts: 252
Registered: ‎12-11-2007

Re: Online sellers and HMRC

in reply to papso22
Here is some for starters.....

http://www.telegraph.co.uk/finance/personalfinance/household-bills/11632478/HMRC-targets-Etsy-eBay-a...

" The Revenue has sent 14,000 letters to traders suspected of running a business and failing to declare this on their tax returns.

Of these, 1,000 letters are being sent to people where the taxman has already identified a shortfall on their self-assessment forms.

Some of those targeted make as little as £100 profit online, Telegraph Money has learnt."
Community Member
Posts: 7,330
Registered: ‎04-09-2011

Re: Online sellers and HMRC

in reply to plasticpiggie

I love the way you have carefully selected bits to quote out of context  from a really rather good and balanced article which everyone  selling on eBay should read.  At least you must have read it in order to select your quotes so that's a good thing.

 

But where is the evidence of racism?