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HMRC investigating 'traders' on eBay etc.


The Admiral
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Interesting article in the Telegraph today about HMRC looking to investigate people who are trading on eBay, Etsy, gumtree etc. And they are not ruling out people who buy and sell items online, so our favourite eBay 'guitar improver' may have to look out. It does of course have implications for people who are buying and selling a lot, if they decide to investigate. The 'if' being a big if of course, and I suspect they are not too worried about a few basses in and out - it's more the people who are selling DVDs or second hand cars from their homes, that they are after - who may be turning over thousands a year. Worth being aware of though.....

http://www.telegraph.co.uk/finance/personalfinance/household-bills/11632478/HMRC-targets-Etsy-eBay-and-Gumtree-sellers-but-when-is-your-hobby-taxable.html

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Wonder how many gigs you have to play a year before that income would be considered taxable - I guess you could just make sure your expenditure in strings and new basses was bigger every year so you never made a profit...


anyway - good - I used to work for a internet business selling on ebay - and it was galling that you would get people selling the same thing as you for half the price as they wouldn't have to pay VAT, business tax, business rates or income tax and nat. insurance on their income. There's always going to be the story of the grandmother who sells 2 knitted hats a month and gets a unfair fine but there will be loads more seriously screwing the system.

One way to find out is google street view the business address... we had a massive warehouse and a team of 12 people, and other companies in our marketplace would sell far more than us out of a small 2 bedroom semi detached house... hmmm

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[quote name='mentalextra' timestamp='1433103631' post='2787906']
They've been doing this for some time

.... and what 'did' happen to the [i]guitar improver[/i]?
[/quote]

As stated this has been going on for years, prior to the Internet it was through checking classifieds (exchange and mart anyone?) and local papers. If they do not data mine ebay / gumtree / basschat etc etc it will be beyond belief. Quite how many private sales you are allowed before you qualify as a dealer is an interesting question. There is also the question of capital gains on even a few sales. Answers from law enforcement and accountancy / taxation BCers welcome.

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HMRC are quite pressed for staff and resources in the current climate of cutbacks. I would imagine that they are not at all interested in anything at a hobby level; they will be looking for high turnover traders who don't have a real-world business existence to match. I'd be surprised if they went after anyone turning over less than maybe £50k a year, apart from maybe the odd one or two to set a high profile example.

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i buy and sell used gear all the time looking for that sound i want. there should be some sort of gas clause
all the stuff i buy I plan to and do use myself but if i dont like it i just sell it on and look for my next pedal, bass amp, bass..... that i think will be "THE SOUND!".
a lot is through paypal and bank transfers so idk how much note there is of that. and i dont really keep notes myself after stuff is gone.........
is this something theyre likely to get pissy about and investigate?

Edited by zacclowes
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Guest bassman7755

[quote name='LukeFRC' timestamp='1433104768' post='2787924']
Wonder how many gigs you have to play a year before that income would be considered taxable - I guess you could just make sure your expenditure in strings and new basses was bigger every year so you never made a profit...
[/quote]

Any income you make from gigs counts towards your overall taxable income in theory, in practice I guess the vast majority of casual giggers with day jobs just pocket the cash and dont declare it. As you say it doesnt hurt to keep some records of expenses just in case you get your collar felt. Its worth knowing that you can offset schedule E travel expenses against any profit as well i.e. 40p/mile upto 10000 miles a year and could probably include travel to rehearsals in that.

Edited by bassman7755
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[quote name='zacclowes' timestamp='1433107908' post='2787971']
i buy and sell used gear all the time looking for that sound i want. there should be some sort of gas clause
all the stuff i buy I plan to and do use myself but if i dont like it i just sell it on and look for my next pedal, bass amp, bass..... that i think will be "THE SOUND!".
a lot is through paypal and bank transfers so idk how much note there is of that. and i dont really keep notes myself after stuff is gone.........
is this something theyre likely to get pissy about and investigate?
[/quote] do you make much profit? In most of our exp GAS costs rather than earns

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Just propaganda from our wonderful new Government. They've cut HMRC back to the bone, closed the customer friendly offices where you could go in and discuss your tax for telephone contact centres that take ages to get through to. And we all know where the biggest tax dodgers are and it isn't selling on eBay.

I used to work with HMRC back in the day and they had a whole department called HINW which was "High Income Net Worth" which was where they recovered loads of Tax by targeting individuals who earned lots.

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[quote name='yorks5stringer' timestamp='1433114637' post='2788047']
Just propaganda from our wonderful new Government. They've cut HMRC back to the bone, closed the customer friendly offices where you could go in and discuss your tax for telephone contact centres that take ages to get through to. And we all know where the biggest tax dodgers are and it isn't selling on eBay.

I used to work with HMRC back in the day and they had a whole department called HINW which was "High Income Net Worth" which was where they recovered loads of Tax by targeting individuals who earned lots.
[/quote]

I had to phone them last week to discuss something, it took 40 minutes before someone answered. Though they were extremely helpful when I did get to speak to someone.

In fact with regard to the OP, I read in the Guardian on Saturday, that HMRC staff have been told to waive the £100 fine for late submission of a tax return, if someone appeals. Mainly because of the time it takes to deal with them.

So do they have the resources to investigate people's selling habits on eBay ?

[url="http://www.theguardian.com/politics/2015/may/30/hmrc-waives-tax-return-penalties-whenever-someone-appeals"]http://www.theguardian.com/politics/2015/may/30/hmrc-waives-tax-return-penalties-whenever-someone-appeals [/url]

Edited by ambient
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The taxman doesn't give a shittt..well known story in Northern Ireland of a famous singer who got caught by the taxman and was being done for £100,000+.
Well he pulled out all these cheque receipts for what he paid the band over the years and the taxman said" why should we worry about them when your here in front of us, they are your problem not ours if you had've paid SOMETHING we would've let it go but you had to be greedy".

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[quote name='cheddatom' timestamp='1433234786' post='2789075']
yeh vodaphone
[/quote]

It
[quote name='cheddatom' timestamp='1433234786' post='2789075']
yeh vodaphone
[/quote]

It went something like this:
HMRC; You owe us £15 billion tax
Vodaphone: We'll give you £4 billion
HMRC: OK

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As one of Vodafone's tax professionals I can say that there is considerably more to this than that statement but that's a long story I shouldn't comment on.

Ultimately it's all down to greed and brownie points. Make an obvious effort to get it right and you'll usually be fine. The other story concerns the very well known jockey who was being done for having various hidden accounts to hide his income from the tax man. He had been pressed to reveal all his accounts and eventually a settlement was made on the basis that he had disclosed everything. They reach agreement on the sum of the penalty and he whips out a cheque book to pay - on an account he hadn't declared.

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