The Tax Office “amnesty” of reduced penalties for e-marketplace and e-auction website traders, that started on the 14th March 2012, is drawing to a close. The intention to make a disclosure has to be lodged with HMRC by the 14th June 2012 and the completed disclosure form and payment should reach HMRC by the 14th September 2012.
HMRC claim that penalties levied under this scheme will be capped at a maximum of 10% of the tax due, and in some cases waived altogether.
This is the latest scheme to try and encourage unregistered tax payers to fall into line and is no doubt fueled by the recent success of prosecutions made as a result of the Plumbers Tax Safe Scheme… For example:- Four month prison sentence suspended for a year and tax recovered of more than £4 Million. Big money is involved.
This facility does not only apply to eBay, but to any online marketplace/auction websites where people are known to trade to either provide or supplement their income.
There is a stark warning from HMRC about this facility:-
“Our aim is to make it easy for online marketplace traders to contact us and make a full disclosure of income, thereby putting their tax affairs in order.
“I urge online sellers who think they owe tax on their income to get in touch and get their tax affairs in order, simply and on the best possible terms.
“The information and intelligence we gather is from a wide range of sources and it allows us to target those who should come forward as part of the e-Markets Disclosure Facility.
“If you owe tax and don’t get in contact, do not assume that HMRC will not catch up with you.”
I would urge anyone considering disclosing under this facility to speak first to an accountant so you are fully briefed about potential wider consequences of disclosing.
Please do not hesitate to contact me if you are thinking this may apply to you.
HMRC have made it very clear that they are declaring war on unregistered traders and are going to focus their efforts on this area after the deadline has passed.