eBay and Amazon traders are in the taxman’s sights

 
A lot of people seem to be doing it nowadays - buying and selling goods on the internet, using websites like eBay and Amazon. In January, HM Revenue & Customs (HMRC) said that it had begun collecting data on users of online marketplaces such as eBay and Amazon and would be using this to pursue unpaid tax, and reports are filtering through to back this up.
 
Q: My husband, who works shifts for the Post Office, and has quite a lot of free time, is a keen golfer. A few years ago he began to buy wholesale lots of golf equipment like sets of clubs, and clothing, and then sell them individually on eBay and he has become quite successful at this. Somebody has told me that this is taxable, but surely it is just my husband's hobby, as he already has a job and has his tax deducted from this? 
A: There are no hard - and -fast rules to determine whether your husband's eBay activities are taxable. It is necessary to consider the facts in each individual case, and to take into account the type, frequency and history of your husband's transactions, along with his intentions when he purchases the goods.
Having said all of that, based on what you have told me your husband's activities do sound very much like self employed trading and therefore subject to tax. This is because he seems to be buying and selling frequently, and is purchasing items with the motivation of selling them at a profit.
The fact that your husband has a job is not really relevant and it is
perfectly possible for someone to be employed and self-employed at
the same time.
 
Q: Is he likely to get into trouble with the HMRC?
A: Small-scale internet traders, who sell goods on websites such as eBay and Amazon, are being hit with very tough penalties if they do not declare their income and pay the appropriate tax on their profits.
According to a new study HMRC are levying hefty penalties to such traders using its 'deliberate defaulters' programme, which means that penalties of around 59 per cent of the amount of tax owed are being reported- on top of paying back the tax itself, and interest.
The best course of action to take now is to seek help to bring his tax up to date by making a voluntary disclosure to HMRC - this could help minimise the penalties which will be due.