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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 15866
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have a problem in that I have been running an eBay

Customer Question

Customer: Hi, I'm Dave. I have a problem in that I have been running an eBay business for almost 2 years that all of a sudden has become successful and now turning over £100K a year with a £40K profit. Never been registered as a sole trader and never been registered as self employed as I'm employed full time also
JA: Thanks. Can you give me any more details about your issue?
Customer: Had a letter yesterday from HMRC asking if I'm trading online or not. Says to call a number and declare yes or no
JA: OK got it. Last thing — JustAnswer charges a fee (generally around $18) to post your type of question to UK Tax Experts (you only pay if satisfied). There are a couple customers ahead of you. Are you willing to wait a bit?
Customer: Yes that's fine
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Submitted: 1 year ago.
Category: UK Tax
Customer: replied 1 year ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  Tony Tax replied 1 year ago.

Hi.

Would you prefer to discuss this over the phone than have a written answer?

Customer: replied 1 year ago.
Hi,Yes please. Could you call me on 07709 287972. Regards Dave
Customer: replied 1 year ago.
Can't take a call just now. If you could give me a written answer that's fine
Expert:  Tony Tax replied 1 year ago.

OK. It will take a while.

Customer: replied 1 year ago.
ok no problem. Regards Dave
Expert:  Tony Tax replied 1 year ago.

Hi again.

First off, don't answer the question HMRC ask if you call the number. By doing that, you will be starting the process of a prompted declaration with higher potential tax penalties (see below). I would suggest you speak to friends and acquaintances who may have an accountant for a recommendation. You can either manage the problem you have on your own or have somebody with tax investigation experience handle it for you. Doing the latter will involve paying a fee but it will also take the stress and worry away from you especially if you are unlucky enough to have an overly officious HMRC employee handle your case. Investing in an expert in the field will protect you from the worst excesses of HMRC.

You should have registered as self-employed within 6 months of the end of the tax year in which you started, preferably earlier. You now face penalties for failure to notify which you can read about here:

http://www.rossmartin.co.uk/penalties-a-compliance/penalties-appeals/380-tax-penalties-failure-to-notify#taxes-time-limits

http://www.hmrc.gov.uk/manuals/chmanual/ch70000.htm

There are notes on registering as self-employed here:

https://www.gov.uk/working-for-yourself/what-you-need-to-do

VAT is another problem. When your turnover reaches £82,000 or will do in the next 30 days, you should register for VAT. It may be that you sell VAT exempt items such as children's clothes but VAT is a minefield for the non-professional especially with an obligation to submit quarterly VAT returns to HMRC. Read about VAT here:

https://www.gov.uk/vat-registration/overview

I hope this helps but let me know if you have any further questions.

Customer: replied 1 year ago.
Hi Tony,Does the fact that that I've received one of these letters mean that HMRC are on to me so to speak?It is headed up as "E-Markets Campaign"?Is this a shot in the dark or have they some intelligence on the matter?I'm only asking as obviously I need to consider my options very carefully here.RegardsDave
Expert:  Tony Tax replied 1 year ago.

I think they probably are. They monitor sites such as ebay and track the site owners down if they cannot find them in their taxpayer databases. There was a disclosure facility called "E-markets Campaign" in 2012 which you can read about here:

http://www.kinsellatax.co.uk/hmrcs-e-markets-disclosure-facility-calls-for-a-general-disclosure-facility/

https://www.gov.uk/government/publications/2010-to-2015-government-policy-tax-evasion-and-avoidance/2010-to-2015-government-policy-tax-evasion-and-avoidance#appendix-9-hmrc-campaigns

If they are running a new campaign, I'm not aware of it but the idea of the campaign was and is to encourage people who have sat on their hands to come clean on favourable penalty terms. I'd be very surprised if HMRC are fishing in ignorance of your ebay business.

Customer: replied 1 year ago.
OK so to that end should I register today as a self employed sole trader? Get the books in order on my side and take whatever comes from HMRC?
Expert:  Tony Tax replied 1 year ago.

You will need to be registered so I'd go ahead but I would expect the same HMRC section to take an interest.

Expert:  Tony Tax replied 1 year ago.

Hi.

I'm just following up. Did my answer help or do you still have questions?

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