Online trading: are you liable for tax?
The forums on eBay.co.uk have been buzzing this week with the news that HMRC has asked eBay for details of its top traders. It makes terrific publicity for HMRC's campaign to highlight the requirement to register as self-employed - which commenced in July - and might also help to uncover a small part of the UK's missing VAT billions.
There were rumblings on MSN back in April 2005 that HMRC were expressing "concern" that sellers on the on-line auction site eBay were not paying CGT on their profits.
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Good news for ebay traders?
I concur with HMRC seeking to tax traders on profits made from trading on e-bay.
All traders shoould register their "businesses" with HMRC keeping accurate records of their sales transaction.
Moreover, the should also introduce their computer equipment and consummable -their car and its expenses (less a proportion for private use); postage and stationary costs; use of home office expenses (less a proportion for private use).
In many cases this will produce losses - often to be offset against other taxed income, therefore HMRC will be deluged by claims for the repayment of tax.
Looks like a grand ides to me!
How to enforce the request ...
in a 'stateless' environment.
What happens if Google (or others) refuse to comply with the request - how is the Revenue going to enforce the issue?
The approach with regard to their own citizens is one thing, however, depending upon the hosting location etc. what rights do they have over foreign nationals in their own country ?
Are the Revenue relying on the good will of those from whom they request information or do they have underlying powers of enforcement