HMRC will soon be able to check your eBay account...
We have often wondered aloud when HMRC have announced they are targetting eBay businesses as to whether HMRC had access to Paypal records- as after all how else would they be able to tie up eBay user FrillyKnickers123 with that respectable librarian in Barnstaple who does a sideline in selling second-hand electricals.
Now, new legislation has been drafted that would mean HMRC are completely entitled to nosy into not only your Paypal info, but your eBay (or Gumtree or Etsy or any other kind of online selling platform) as well in order to ascertain whether there is a hidden trade being carried on. The rules, which will be amended through the Finance Act 2016, expand previous data collection powers already held by HMRC since 2011 to include "electronic payment service providers" and "business intermediaries".
While the first is perhaps obvious, and if banks and the like were already subject to these data gathering powers, it makes sense that electronic-only providers of payment services are also caught. The second category, business intermediaries, covers those who "facilitate and enable transactions between suppliers and their customer or clients" hold "valuable information about the volume and value of suppliers’ transactions."
The proposed changes do follow a consultation period, and while everyone wants to help prevent tax evasion, some were concerned about the
evergrowing Big Brotherness invasiveness of HMRC's powers. However, HMRC claims to have "evidence that many such suppliers currently underpay, or do not pay at all, appropriate tax on the income generated from these transactions", which is probably fairly likely, and should, at least, catch the dodgy traders; it is estimated that the change will generate additional revenue of £285 million per annum by 2020/21. Although it does mean that you might find yourself having to pay more for your bits of tat if the sellers actually have to start accounting for VAT, for example.
If you are struggling with insomnia, the draft legislation can be found here, but if you are an eBay trader who is correctly declaring all income, there's nothing to worry about right? Right?