UK Tax Questions? Ask a UK Tax Advisor for answers ASAP
Would you prefer to discuss this over the phone than have a written answer?
OK. It will take a while.
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:
There are notes on registering as self-employed here:
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:
I hope this helps but let me know if you have any further questions.
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:
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.
You will need to be registered so I'd go ahead but I would expect the same HMRC section to take an interest.
I'm just following up. Did my answer help or do you still have questions?