Online Sellers Targeted by HMRC for Unpaid Taxes on Internet Sales

HMRC has information on thousands of online sellers who have failed to pay tax on sales made over the Internet. Sellers on platforms such as eBay, Etsy, and Facebook Marketplace are among those who have received nudge letters from HMRC containing details about their potential tax liability.

The campaign began in January and has seen individuals receive letters containing case reference numbers. This suggests that HMRC possesses detailed information on sales activity and invites sellers to respond within 30 days, summarising their tax position and voluntarily disclosing any undeclared income within 90 days.

The nudge letters state that HMRC has “information that shows you’ve earned money (income) from online marketplace sales” and that it “shows you have not told us about some or all of this income.” Sellers are invited to complete a ‘certificate of tax position’ with the option to update their tax affairs, confirm that they have accurately declared all income, or admit that they have not declared their income. Individuals are given 30 days to respond with their certificate.

Sales of goods up to the value of £1,000 per annum are tax-free. However, sales exceeding this amount should be declared and taxed as income. Many sellers have built successful micro-businesses, trading various products, from handbags to car parts. Once the £1,000 threshold is reached, HMRC seeks its share and employs increasingly sophisticated technology to track down unpaid taxes.

If you have received a nudge letter, it is crucial not to ignore it. Nonetheless, seeking professional advice before responding is advisable to ensure you do not pay more tax than necessary.

Taking prompt action upon receipt of a letter is essential.

In need of assistance? Discover our comprehensive range of services. Our expert team is available to provide support with everything from payroll to taxation advice. Don’t hesitate to contact Mercian Accountants today to ensure your tax affairs are in order.