Online sellers targeted for unpaid tax

HMRC has information on thousands of online sellers who have failed to pay tax on sales over the internet

Sellers on eBay, Etsy and Facebook Marketplace are among thousands who have received HMRC nudge letters with details about their potential tax liability.

The campaign started in January and the letters contain individual case reference numbers, suggesting that HMRC has detailed information on sales activity and invites individuals to respond within 30 days summarising their tax position and make a voluntary disclosure of their undeclared income within 90 days.

The nudge letters state that HMRC has ‘information that shows you’ve earned money (income) from Online Marketplace sales’ and that it ‘shows you have not told us about some or all of this income’.

The nudge letters invite individuals to complete a ‘certificate of tax position’ with the option to bring their tax affairs up to date, state that they have correctly declared all income, or that they have not declared their income. Individuals are given 30 days to respond with their certificate.

Anyone can sell goods up to the value of £1,000 a year without having to pay tax. Sales over that amount should be declared and taxed as income.

Some have built successful micro businesses, buying and selling everything from handbags to car parts. But when you reach that £1,000 a year threshold HMRC wants its share and has increasingly sophisticated technology to track down unpaid taxes.

If you have received a nudge letter do not ignore it. Do, however, take advice before responding to ensure that you do not pay more tax than you should.

It is important to take action when a letter is received.

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