Possible new HMRC move on eBay, Gumtree, AirBnB etc.

[Edwin]

FYI

Anyone running a business online through an app store, listings site or similar services could face new scrutiny on tax as part of a government crackdown on tax evasion.

Under the new terms, Airbnb, Apple, Amazon eBay and Gumtree could all be required to hand over user information to the government.

http://www.wired.co.uk/news/archive/2015-07/27/uk-tax-airbnb-ebay-gumtree

Not sure how workable that would be in practice - presumably they would then sort by number of transactions or total volume to separate the genuine hobbyists or those getting rid of a handful of unwanted items from those making a partial/full living out of it. Still, perhaps worth bearing in mind if you do a lot of volume through sites of that nature...

 

[newguy]

http://news.bbc.co.uk/2/hi/business/6354003.stm
http://www.bbc.co.uk/news/business-13754275
http://www.bbc.co.uk/news/business-18108019

Déjà vu

 

[Edwin]

You're right, they've poked around the subject before.

The difference this time is that they may get the (presumably comprehensive) info directly from the sites rather than relying on tip-offs and robo-scanners. That's if they can successfully "persuade" them to divulge the information, which is far from obvious.

 

[ian]

I sincerely hope they do; I'm all for consumer choice and low prices but eBay is a hotbed for low rent retailers selling without any tax obligations (or customer service!). I use to have a competitor that traded on eBay (versus me direct through own site) that would undercut everyones prices to point where you knew they were taking advantage of purchasing excluding vat, then selling without any tax at all, well under trade value. The owner stayed ahead of the tax man by simply changing his company/ebay name often (usually buying existing high rep accounts) and trading out of a rented garage. Fortunately I knew all the distributors supplying him and one by one had them stop - not seen his company trading since.

 

[monaghan]

I find it quite interesting sometimes when asking eBay sellers for a VAT receipt, I look at the items in the "shop" and wonder how they can be below the VAT threshold with that many items in stock

It would be good to see them clamp down on it, this would help level the playing field for the legitimate small business that has to compete with all the rule breakers, it may also bring in a few quid to the treasury which would go a little way to getting the country back on it's feet again.

 

[BeachLife]

Hopefully, more than cracking down on hobbyists, it will crack down on overseas sellers delivering goods to UK consumers from a UK fulfillment centre that have not registered for VAT. The sales threshold for registering is zero, and has been for some time. However it is very easy to find sellers trading millions per year that are not registered. It seems to me that Amazon and eBay could easily prevent sellers listing if they didn't have a verified VAT number, but they are simply not interested. Why would they be? They openly evade paying taxes in the UK themselves.

 

[RobM]

Some interesting posts here. I would suggest learning more about VAT laws in Europe and UK though.

 

[ian]

Indeed, VAT threshold is £82,000 in turnover before you must (compulsory) register, but as these eBay sellers are not putting anything through official books anyway, there is little point. They evade tax and vat and must be resolved, it is so much more damaging to independent small businesses that your average consumer realises.

 

[BeachLife]

Indeed, VAT threshold is £82,000 in turnover before you must (compulsory) register, but as these eBay sellers are not putting anything through official books anyway, there is little point. They evade tax and vat and must be resolved, it is so much more damaging to independent small businesses that your average consumer realises.

That is for a UK based seller. For a non-EU seller selling stock to UK customers from a UK fulfillment centre the threshold is £0.

 

[ian]

That is for a UK based seller. For a non-EU seller selling stock to UK customers from a UK fulfillment centre the threshold is £0.

Indeed, but this topic is regarding our governments crack down, therefore I assumed we were discussing UK based business. Obviously different rules apply for elsewhere.

 

[BeachLife]

Indeed, but this topic is regarding our governments crack down, therefore I assumed we were discussing UK based business. Obviously different rules apply for elsewhere.

Yes, sorry. That's my point though, I hope our government's crackdown includes evasion of UK VAT from overseas sellers through UK marketplaces such as eBay and Amazon. It's widespread and easily found, not involving sellers who may sell around the UK based threshold, but selling millions.

 

[ian]

Yes, sorry. That's my point though, I hope our government's crackdown includes evasion of UK VAT from overseas sellers through UK marketplaces such as eBay and Amazon. It's widespread and easily found, not involving sellers who may sell around the UK based threshold, but selling millions.

Hope so, but going for the UK businesses/individuals first selling without tax liability would be a good start, though I suspect eBay will suffer a great downturn in customers. I got quite sick of customers asking if I could price match someone on eBay selling at half the price; the customer just sees the bottom line price, they don't care that the 'individual' is claiming to be a business, using a fake VAT number and operating out of the back of a newsagents where he works part time! It is quite amazing how easy it is to hide on eBay.

 

[BeachLife]

though I suspect eBay will suffer a great downturn in customers.

I agree, I think eBay and Amazon are effectively providing a vehicle for tax evasion, which is incredibly frustrating for an honest UK business selling through them. The HMRC are aware I'm sure, but move very slowly.

I would suggest learning more about VAT laws in Europe and UK though.

Where did we go wrong?

 

[orchardapple]

but its easier to go after the likes of Amazon/Ebay etc at their corporate level and tax them beyond all recognition on sales made in the UK

and i mean Sales before 'expenses' such as paying lux/offshore based companies a 'licence fee'!

 

[RobM]

Where did we go wrong?

No sorry I misunderstood. I didn't realise you were talking about selling to UK customers *from* UK.