Holiday Letting Tax Advice please.

eggman

Quite a few years ago I started selling Dvds on Ebay. Although I didn’t make much profit I did end up with a high feedback rating.

I stopped this a few years ago because the retailers I was buying from were selling the Dvds themselves on Ebay so I could no longer compete. I only sell on Ebay very occasionally now and not things I have purchased to sell on.

A couple of years ago my Wife and I purchased a chalet on a holiday park in Cornwall. The park rent it out on our behalf and it just about covers the park fees etc.

In the Summer I sold a couple of weeks on my Ebay account and was surprised at the interest.

For next year I want to go it alone and not have the park as my agent. This means I want to sell weeks on Ebay, to friends and possibly other means so basically I want to run it as a business.

Unfortunately my dealings in the past were never declared and I am listed as a private seller on Ebay.

I want to declare everything that I am doing next year to the taxman but I suppose that I am apprehensive that it could mean the taxman backtracking through all my previous dealings. I am prepared for a fine but not sure how much of one!

Could anybody advise how and where I start in this process.

Thanks in advance.

fengirl_2

If you want to come clean now about your previous EBay dealings, then you need to do it now and not wait until next year's self assessment is due. You should also obtain the services of a tax accountant who will negotiate with HMRC and get the penalty charge as low as possible. Penalty is up to 100% of the tax lost, but this is mitigated in realtion to your coperation, the number of years involved, the amount of tax involved and whether it was you who came forward first. Interest will also be due on the tax lost.
Tax accountant will contact HMRC for you and deal with the paperwork - you dont have to retain him for future years. Be prepared to make a payment on account once rough figures have been prepared.

eggman

Thanks for that information. If I don't mention Ebay but just tell the HMRC that I have purchased a holiday property for family holidays and letting purposes will that be good enough or are they likely to backtrack. On my previous Ebay activity it wasn't a money making machine and it was about 5 years ago and I don't have any paperwork on what I bought and sold. How would I be able to convince HMRC of that. Thanks for your help.

fengirl_2

You really need to take advice on this. HMRC could ask to see your EBay and/or Paypal account details which would show old transactions. It is not the policy on this forum to advise people not to declare earnings for tax.

eggman

Thanks again and yes now I realise that what I was asking was not a good idea. I think like you said I need to get some advice from an accountant.

Hoddie_2

Most taxpayers - or 'customers' as HMRC insist on calling us - fall so far below their radar they could march up to their local enquiry centre with a brass band and a choir singing "I didn't declare any income in the last 5 years" and they'd probably be ignored.

Having said that, I believe I've read somewhere that HMRC and eBay do occasionally work together to identify people who have a substantial undeclared income.

It all comes down to whether you'd rather let HMRC know your earnings and pay the penalty, or spend the next few years worrying about what might happen should they find out. The amount of worry would depend on how much you've earned. Me? I'd probably only worry if my previous profit were a four-figure fee.