eBay seller? Private tutor? The taxman cometh....

vivatifosi

I don't think anyone else has posted this. It's an interesting talking point given we've discussed tax evasion on several occasions before and doesn't really seem to be being discussed in the mainstream press much:

eBay businesses, private tutors and cash-in-hand traders are now becoming the focus of HM Revenue & Custom investigations in its latest efforts to recover around £7bn lost to the Treasury each year.

The taxman said it would mine its computer systems for anomalies, pinpointing people who have “failed to pay the right tax”.

It said that there would also be scrutiny of the ability to hide second incomes from private maths tutors as well as fitness and dance coaches.

Businesses using trading platforms like eBay and Gumtree will be examined as will tradesmen willing to work without charging VAT for their services.

HMRC said a similar campaign last year against doctors and dentists had raised around £10m, including one single payment of £1m in unpaid tax and fines. Two earlier amnesties for offshore accounts generated £500m.

http://www.bmmagazine.co.uk/the-tax-man-is-set-to-ebay-traders-hard.1456

PasturesNew

Good...
I pay tax, so should they... especially as they've probably got a lot more than me anyway.

Sylvia1982

I'm sure they had mentioned they were going to look into this several years ago... finally they may actually do it

tartanterra

An investigation into tradesmen operating under the VAT limit is long overdue.
It skews the entire playing field when you play by the rules, but know that many others are doing "cash in hand" jobs.

Funnily enough, the VAT people seem desperate to carry out investigations into VAT registered businesses, yet those carrying out work for cash, so that they remain below the VAT limit seem to be left alone.

tomterm8

It seems to me this is a publicity stunt.

Graham_Devon

Sylvia1982 wrote: »

I'm sure they had mentioned they were going to look into this several years ago... finally they may actually do it

Was just going to say that myself.

If I recall correctly regarding the ebay thing, anyone with a turnover of 8k in a year, would automatically be investigated (i.e looked into initially).

HMRC were said to be implementing it. So I guess they didn't implement it?

vivatifosi

tomterm8 wrote: »

It seems to me this is a publicity stunt.

For sure it makes sense for the government to say they will clamp down on everyone, it sounds fair. However thinking about it, they've spent so much money on new IT systems and we are all filing on line, they have access to other relatively government databases for traders etc (eg Consumer Direct) it wouldn't be surprising if they could data mine on a previously only dreamt of level. I'm glad if they clampdown on cheats, but it is scary at the same time.

STing

Scare tactics. The government is not competant enough to find the vast majority of evaders.

Once again they hope to scare people in to declaring income.

bo_drinker

There is nothing illegal in trades men trading below the VAT limit. There are genuine reasons why a lot do this, if they are working for the man in the street the last thing he wants to do is add another 20% to his bill. If the customer buys the materials then better still, the tradesman doesn't have the turn over.... nothing illegal in that.... IR know the score... As someone else said it's all scare tactics hoping a few will come clean, and it will be a few, if any...

Loughton_Monkey

I wonder how much data e-bay provide to them?

My tax office recently "provided me with an opportunity to put my affairs in order" in the form of sending me a self assessment form.

As you probably know, all the figures need to be insert in 'whole pounds'. But now I have had a response where they have chosen to re-calculate using £.pp which has determined that I owe them a whole 90 pence. I have been told to do nothing until they have investigated which method of repayment they wish to offer me, and to stand-by awaiting instructions.

I feel most ashamed to be in debt to Mr Osbourne, who has enough debt of his own. I think I should be generous and send them a pound.

As far as I know, my local little 'Hand Car Wash' merchants, the Car Boot Sale doyens, and dozens of 'hand made jewellery' merchants to be found at every local horse show tend not to advertise on e-bay.

As for the local tradesmen, though, HMRC have made it nice and easy haven't they? 20% VAT, and 20% Income tax. So a 'proper' quote of, say, £10K to do up the roof should be charged £12K and the builder keeps £8K. Nice and simple now. £10K in crisp £20's, and Vatman can go sing for his supper. Roofer is £2K better off. Everyone's a winner!

AndyGuil

With regards to ebay, if the item sells for less than you bought it for that should mean it can be used to offset CGT elsewhere.