HMRC sent online marketplace letter for undeclared sales.

Hoenir

MattMattMattUK said:

Hoenir said:

HMRC can be like a dog with a bone. Once they've got their teeth into something they are not going to let go. Besides which they have formidable powers. Onus is very much on the taxpayer to prove their case. Make sure that you have your ducks lined up in a row. Before engaging further. You should have retained at least your last 6 years of accounting records for this very scenario. If you do actually have undeclared sales of any kind.  Then self declaration is a way of mitgating penalties and avoiding the HMRC's full wrath. 

Isn't the problem going to be that legally the OP's wife legally has a bunch of undeclared sales, perhaps going back several years and HMRC do not allow spouses to unilaterally transfer income between themselves for tax purposes? The fact that the OP has declared these probably matters little to HMRC.

I'm referring to being co-operative rather than evasive with the HMRC's enquiries. Play games at your own risk.  Where no records exist the HMRC has the power to assess. 

mancmanc

So after all the initial panic, I have got my head straight. I havent heard back from HMRC but this is the factual information I am going to give them as to why I dont feel my wife owes any tax, it is then up to them if they did want to pursue it, I will be interested on peoples views here.

Any retail sales on my wife's ebay accounts will be to do with my sole trader business. Up until recently, ebay have not required many details for ebay accounts, since they have requested more details, including Nino, I have not sold any business sales on her accounts with a Nino entered. All sales that have been on accounts that were originally set up in the wife's name will always feed back to a bank account with my name on it, i.e joint bank account. My wife does not have a single bank account in just her name.
My wife would not ever have exceeded the 1k allowance for things bought to resell.
My wife would not ever exceed the 6k allowance for selling personally items.

Every year, all sales are collated by myself, personal sales removed, business sales are on my tax return. Same with costs, all business costs collated and anything personal removed. business costs are on my tax return.

any account we have with anywhere is attached to bank accounts with my name on them, either our joint account or my personal bank account. so any excess cash will end up in my bank, or expenditure will be paid off from my bank.

The above is all true, this is not me burying my head in the sand. I assume there are technicalities along the way that say I shouldn't have done this or that. Is it worth following up to HMRC with this information? or do I just wait for them to come back to me?

silvercar

If I was mrs mancmanc, I would reply to hmrc letter, saying I dont use eBay, but that mr mancmanc has an account in my name and that he declares all the tax due on it and has written separately to hmrc outlining this. 

Hoenir

I would wait for further communication. HMRC will determine which direction this enquiry will take. 

Nomunnofun1

I would repeat what I stated earlier - HMRC has no authority from Mr mancmanc to act on behalf of Mrs mancmanc. 

HMRC are duty bound not to reply to Mr mancmanc without that authority.

mancmanc

Nomunnofun1 said:

I would repeat what I stated earlier - HMRC has no authority from Mr mancmanc to act on behalf of Mrs mancmanc. 

HMRC are duty bound not to reply to Mr mancmanc without that authority.

Mrs Manc also emailed them originally (same day) stating the same, that the sales were belonging to mr Manc who also sent them a message seperately saying all is declared in his name.

my extra info message earlier today was more info which in my eyes backs up why mrs Manc is not due to pay tax, wasn't sure wether to follow up to HMRC with this level of detail because my lack of detail on here led people to make me feel like im going to be in major trouble because ebay accounts originally set up in wife's name. I dont want HMRC to have the same immediate thoughts if a more detailed summary can avoid that happening

But general consensus is, just wait for reply? 

eskbanker

mancmanc said:

my extra info message earlier today was more info which in my eyes backs up why mrs Manc is not due to pay tax, wasn't sure wether to follow up to HMRC with this level of detail because my lack of detail on here led people to make me feel like im going to be in major trouble because ebay accounts originally set up in wife's name. I dont want HMRC to have the same immediate thoughts if a more detailed summary can avoid that happening

But general consensus is, just wait for reply? 

Yes, just wait for reply - you may feel that you have a strong case for her Ebay income to be regarded as being yours but there's no point in getting into that at this stage, so see what HMRC come back with.

silvercar

If I recall there are some very good reasons for having more than one eBay account. It’s not just to take advantage of new user offers etc but listing things for collection from an area that isn’t your main accounts base attaches the wrong area/ postcode to the items, so buyers on a collection only auction don’t see where the item actually is. Even if you put the location in the description, the searches will show it as being at your home base. 

eskbanker

silvercar said:

If I recall there are some very good reasons for having more than one eBay account. It’s not just to take advantage of new user offers etc but listing things for collection from an area that isn’t your main accounts base attaches the wrong area/ postcode to the items, so buyers on a collection only auction don’t see where the item actually is. Even if you put the location in the description, the searches will show it as being at your home base. 

But surely the issue isn't about how convenient it is for sellers to have multiple Ebay accounts, and is simply (as far as HMRC is concerned) about who holds the accounts and is therefore liable to taxation on the associated income?

silvercar

eskbanker said:

silvercar said:

If I recall there are some very good reasons for having more than one eBay account. It’s not just to take advantage of new user offers etc but listing things for collection from an area that isn’t your main accounts base attaches the wrong area/ postcode to the items, so buyers on a collection only auction don’t see where the item actually is. Even if you put the location in the description, the searches will show it as being at your home base. 

But surely the issue isn't about how convenient it is for sellers to have multiple Ebay accounts, and is simply (as far as HMRC is concerned) about who holds the accounts and is therefore liable to taxation on the associated income?

Given that some people have accounts in the name of deceased relatives and pets, who does hold the accounts? And if we accept that the beneficial ownership of the accounts in the name of deceased relatives and pets is a different person, surely that person can have beneficial ownership of accounts of people that are alive? Remember, certainly for eBay user IDs that have a small amount of activity, the only ID is a made up user name, an email address and a name. So there is no checking of NI numbers etc for small activity accounts.