Have a question? Like to know more? - Contact us or Call +44-1865 292200 or +44-20 7436 4773, Mon-Fri 8:15am - 5:15pm
Have a question? Like to know more? - Contact us or Call +44-1865 292200 or +44-20 7436 4773, Mon-Fri 8:15am - 5:15pm
2 minute read
Following the rise in internet trading through sites such as eBay, Gumtree and Amazon, HMRC has sought to clamp down on those who fail to pay tax on the profits arising from online selling.
HMRC’s last campaign to target online sellers raised more than £9 million in tax, and recent reports have suggested that tax officials are once again stepping up their efforts to recoup unpaid tax.
If you sell unwanted personal items occasionally, whether through an internet auction site, classified advertisements or at a car boot sale, you will not be treated as trading for tax purposes. However, if your selling activities are more regular than this, you may be classified as ‘in business’ and therefore liable to tax.
Over the years, the courts have developed nine ‘badges of trade’ (see below), which can be used to help determine whether someone is carrying on a trade.
The nine ‘badges of trade’
HMRC states that these ‘badges’ will not be present in every case, and that the presence or absence of a particular badge is unlikely, by itself, to provide a conclusive answer to the question of whether or not there is a trade.
We can review your selling activities to determine whether you are liable to tax. Should you be classified as in business, you will need to register with HMRC as self-employed. We can help with this process – please contact us on 01865 292200 for further advice.