E-traders urged to set tax records straight

People trading on the internet who haven’t paid all the tax they owe are being invited to come forward and pay up under a new HM Revenue & Customs (HMRC) campaign.

The e-Markets Disclosure Facility will allow online marketplace traders to pay the tax they owe and benefit from lower penalties, rather than waiting for HMRC to catch up with them.

Online marketplace traders have until 14 June to tell HMRC that they want to make a voluntary tax disclosure. They then have until 14 September to tell HMRC about tax due and make arrangements to pay any tax interest and penalties they owe.

If they make a full disclosure of what they owe before 14 September, some e-traders will receive no penalty at all. Most will receive a penalty of no more than ten per cent of the tax owed.

After that date, using information collated from different data sources, HMRC will investigate those who have failed to respond. Those who are found to have unpaid tax liabilities will face higher penalties of up to 100 per cent of the tax unpaid or, potentially, criminal prosecution.

Marian Wilson, head of HMRC Campaigns, said the initiative people using online marketplaces to buy and sell goods as a trade or business and who fail to pay the tax owed.

She added: “Those who only sell a few items and who are not traders are unlikely to be liable to pay tax on what they sell and will not be targeted by this campaign.

“Our aim is to make it easy for online traders to contact us and make a full disclosure of income, thereby putting their affairs in order.”

More than £500 million has been raised by HMRC from voluntary disclosures, and a further £105 million from follow-up activity. Previous campaigns have targeted offshore investments, medical professionals, plumbers and VAT defaulters.

A YouTube video is available giving guidance to people wondering whether their buying and selling on an e-marketplace website can be seen as trading can be viewed at: http://www.youtube.com/watch?v=uptdjVD2LgI

Link:  Notifying HMRC about undisclosed income