‘PIN MONEY’ OR FULL TIME TRADER?


A NEW HMRC campaign, launched on 14 March, now targets individuals who regularly sell goods on e-marketplaces, in one of HMRC’s latest bids to raise revenue.


What is an e-marketplace?


An e-marketplace is an online market or shop where buyers and sellers trade with each other over the internet, with the largest of these being the online auction house ebay. HMRC are not looking at the occasional seller who trades infrequently and sells personal possessions which they no longer require. Instead they are seeking those traders who make a living from regularly selling goods for a profi t but who do not declare these earnings. The campaign will, in the fi rst instance, look to individuals to come forward to declare their earnings and settle their tax on favourable terms. Normally run in two stages, the fi rst stage will see HMRC issue deadlines for individuals to come forward to declare their intention to use the disclosure opportunity and secondly, making the disclosure


ARE YOU A TRADER?


IN order to clarify at what stage you stop being an individual and start being a trader HMRC have produced a list of eight questions which when one or more A’s are selected will confi rm trader status. These are:


Q1 A


B


Q2 A


B


Q3 A


B


Q4 A


B


How, and why, did you get the things you are selling? You bought them so you could sell them again to try and make a profi t. You’re selling personal possessions you don’t want anymore, or things given to you/or inherited.


How often do you sell things? You make regular sales. You have only made one sale and you don’t think you will make anymore.


How do you sell? By registering as a business seller or as an online shop with an internet auction site. When you have something you want to sell you advertise it, but you don’t sell enough to make it worth setting up as a business user or shop.


Do you change or improve the things you’re selling? You mend or change the things you buy (that might include splitting things into smaller quantities), so that you can make more profi t on them. You sell things as they are because you just want to sell them quickly.


6 Business Matters Seller Beware!


and paying any arrears. HRMC have stated that for those who do not voluntarily disclose this information that they will use other sources to seek out people whom it thinks should


have come forward during the campaign but have failed to do so, with the result of higher penalties being issued and the possibility of a criminal investigation.


AVON CALLING THE Daily Mail has recently reported that the taxman is also concerned about undeclared taxes from other sellers and is now targeting stay-at-home mums who earn ‘pin money’ as Avon ladies and hosting Tupperware parties. The Revenue’s Gary Ashford warns: “Direct marketers and party planners who have not been including the taxman in their parties risk getting a very unwelcome invitation from HMRC”.


Q5 A


B


Q6 A


B


Q7 A


B


Q8 A


B


How quickly do you sell things? You sell things that you’ve only just bought and you’re hoping for a profi t. You’ve had the things you are selling for quite a while.


Are you running a business selling similar things?


The things you sell are related to your own trade or business.


The things you sell are not things you would sell in your own trade or business.


How did you pay for the things you’re selling? You had to borrow money to pay for the things you’re selling. You sell things that you make as a hobby and you only want to cover the costs?


If you make the things you sell, do you charge more than they cost you to make? You try to sell them at a price that covers your costs and brings in a profi t. You sell things that you make as a hobby and only want to cover your costs.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8