Individuals that make money using online auction sites have just two months of their original three month window to inform the HM Revenue & Customs of their income, if they are using e-Bay or any other auction site to make money.
e-Bay is an online auction and shopping website which was founded in 1995, one of the major successes of the dot-com bubble. It allows people from around the world to buy and sell a large variety of goods and services.
Three month amnesty
The tax authority has provided sellers with a three month amnesty, in which they are able to come forward voluntarily. These people will then be provided with another three months to pay off any tax that is outstanding, which will include any penalties and interest.
Rawlinsons, who are an accountancy firm based in Peterborough, are warning major users of e-Bay to make sure they step out and declare their interest in order to escape any penalty charges. These are charges HMRC is willing to hand out, with those not complying standing a strong chance of being part of a criminal investigation.
Ken Craig who is a partner at Rawlinsons said that HMRC is holding what it is calling an ‘e-Markets Disclosure Facility’ which is also known as an amnesty. Any person using e-Bay to make their living must reveal that they are, and in turn pay any tax they should have paid.
However, people who are using the online portal to sell on their unwanted stuff will not be facing such action, since the amnesty is only aimed at e-Bay traders. These are people who are using online marketplaces to make money without paying any tax on their income.
The intent from HMRC is clear; they are recruiting additional workers to make sure no stone in unturned. They have also stated that they will be using their full investigative powers to catch these sellers who are not paying any tax on their earnings.
The repercussions for those individuals who choose against coming clean are stiff, with penalties of up to 100% of the tax owed being highly likely.
Robot software being employed
The amnesty had begun on March 14th, and with a month already passed these traders have until June 14th to comply. Any person who fails to arrange a full payment before September 14th will face a penalty of no more than 10% of the tax they owe, while there is a chance others may escape the penalty in its entirety.
Ken Craig has said that HMRC will be using robot software, to go through the internet searching for frequent transactions. He went on to say that there could be some grey area when considering if an online seller is a trader, at which point advice will be taken.
Those who are selling their unwanted items now and then for under £6,000 per year will not face a penalty, the problem will arise for people who are intending on buying and then selling to make a living said Craig.