Why HMRC "refuses to discuss" eBay, web-robots and your personal information

16 June 2011

privateHMRC is claiming to be able to find tax-evading taxpayers by monitoring eBay? But how are they able to do this? When we asked HMRC, they refused to discuss how they might be getting the information they'd need to link a (usually) anonymous username to a taxpayer. Interested? We were.

Yesterday, HMRC issued a press release talking about their ‘areas of interest’ for 2011. In a similar vein to the previous Plumbers’ and Doctors/Dentists ‘amnesties’ (HMRC prefer to call them ‘opportunities’ rather than amnesties as you still have to pay any unpaid tax), the newest targets on the list are teachers, who do outside tutoring or exam marking, and eBay sellers.

An HMRC spokesman said that they are not interested in the data on every eBay user. The example they gave is that Mr Smith who disposes of 2 china pieces a month is probably clearing out the loft, but Mr Smith who sells 50 china mugs a day is probably trading. And they do have a point, someone selling that kind of volume would most likely be considered trading and should pay income tax on the profits same as for any other business.

HMRC have actually had the ‘spying’ Xenon software for about 4 years, the new development is that they can now, apparently,  link the Xenon software to their Connect Self assessment data to find matches, or rather, omissions. But regardless of whether you think HMRC ought to be using this type of software to sniff out tax evaders, there's a more important question.

How are HMRC matching eBay usernames to Self Assessment records?

HMRC state categorically that they are not obtaining any personal details from eBay directly. My own eBay username does contain my (fairly unusual) surname, but most do not, and none I have seen include the ten digit unique taxpayer reference (UTR) used in the Self Assessment system.

We asked HMRC how they would know which taxpayer (or non-taxpayer) RatBoy or SillySnuffles or Sexy229 was if they weren’t getting these details from eBay? At best HMRC could access a username and postcode from the user’s profile as part of their eBay web-bot trawl, which is still not enough to identify an individual taxpayer.

So we asked a HMRC spokesperson.

HMRC "refuses to discuss" their data collection methods. We asked whether this might appear as though they are merely bluffing and the web-robots can't link eBay data to Self Assessment. We were told HMRC does not do bluffing. So we asked whether the fact that they are able to link eBay accounts to taxpayers suggested that they were somehow obtaining eBay users personal details, possibly in breach of Data Protection regulations. HMRC said this was "ridiculous" and that to suggest that a Government organisation would have such a Data Protection issue would make HMRC "animated and annoyed".

In fact, Bitterwallet was told HMRC would be so "extraordinarily annoyed" that they would get "lawyers involved". Good job we didn't ask a non-ridiculous question then.

We asked the HMRC spokesperson to put this in writing. This is what we got:

As we discussed we cant go into detail about our intelligence gathering, HMRC always abides by the law.

The vast majority of people who trade on line have nothing to worry about, we are only interested in people carrying out a trade, some one with the intention of making a profit.

I will send you more detail.

So aside from refusing to even discuss our concerns, most people who trade online apparently have nothing to worry about.  Funny, call me a Chartered Tax Adviser, but I thought that was the entire point of the new 'area of interest', i.e. to catch those who are trading online.

Good job this chap knows everything about HMRC's data collection practices as he clearly isn't up to speed on their latest campaign.

TOPICS:   Privacy

32 comments

  • The B.
    They say not ebay but surely Paypal would be a better bet? They probably have a set limit that paypal users can make per month before they check them out, they cross reference on bank details.
  • Alexis
    to suggest that a Government organisation would have such a Data Protection issue would make HMRC “animated and annoyed”. Four letters: DVLA
  • axisofevil
    If so, PayPal (owned by Ebay) will be issuing name and address and amount details to the revenue. P.S. Can I just say that I got a £100 tax refund cheque yesterday .
  • Daniel
    Sam, can't you make it clear your requesting the information under the FOI act?
  • Tom
    Many of the big sellers have their contact information at the bottom of the item page, you can look at the feed back to tell how much and when the item was sold, thus all you need is a scraper to pull off all this information and you can get a good esitmate of how much that ebay user has sold. FOI does not cover method only information I think, it would be like asking MI5 how they tap phones.
  • Gunn
    Cant the software just bid on an item and win it then get the sellers payment details, bank account etc. and match that way. unless the item was very high value its not much cost if they can catch them on years of unpaid tax.
  • ole
    Fuck em. If they aint paying their tax, then they should be investigated every way possible... I'm fed up of being a law abiding citizen and paying my taxes. Its the law so fuck em.
  • jo j.
    Oh and don't bother putting stamps on any government post as they will pay the postage and the handling fee. Also make sure you send any letters/complaints via your mp as they have to get dealt with within 3 days unlike common post which takes months.
  • pedant
    Isn't a "trade" the exchange of one item for another, including an item on ebay for cash. Therefore anyone who makes a sale on ebay is making a trade. "Carrying out a trade" suggests a regular series of transactions constituting a business. He didn't express it well and could have used less confusing language, but I think what he was getting at is clear and it's a bit pedantic to criticise that part of the issue when there are more important aspects.
  • tom
    I think this is a great article! Can't wait for the next update. My guess is that it is all bluff from the HMRC...
  • Phil
    @jo jenkins - Thats a little bit silly. Costing the gov more only ultimately puts up the tax we pay? --- I agree with ole - make the cheeky gits pay - I have to!
  • J
    After the cost of the items, ebay and paypal fees then postage and packing there's little margin for profit anyway. Probably better off designing some online auction and internet payment method.
  • Ex P.
    Jo Jenkins is quite right about complaining via your MP . I used to be a Civil Servant and when we got a letter from an MP we had to drop everything (o'err) and deal with it no matter how petty the complaint was or even if they were in the right.Called it a Flag Case. That said I wouldn't make it my first port of call as your MP would probably chase you if you had not wrote to the Department concerned first (unless there was some publicity in it)
  • Brad
    Yeah I guess they have to make up that massive tax bill they let Vodaphone off with some how.
  • Mr M.
    I'm pretty sure the HMRC can request any details they want. Ebay has all your contact details shirley? At the minute they're targeting plumbers and have access to every notification a business has made to gas safe about installs etc. They can then check that you're declaring what you should be earning from the work you've done.
  • bawbag
    The same way they have been dealing with evasion for years: Test purchases. It ain't rocket science. If a person is trading or not is based on the 'badges of trade' look them up, they are a well trodden path that has been through the courts.
  • Dick
    There is a difference between "on line" and "online". Anyone that is a business trader (as registered with eBay) has to show their business address so it can be seen before a purchase is made. If you think someone is a trader rather than a hobby seller, then grass them up to eBay. I have done so in the past.
  • bogbrush
    ,¸¸,ø¤ºGREATº¤ø,¸*¸,ø¤ºTAXPAYERº¤ø,¸*¸,ø¤ºRECOMMEND!!!!!º¤ø,¸*¸,ø¤ºTHANKSº¤ø,¸¸**
  • CaptainCretin
    Yeah, they will go after them with the same vigour they go after used car salesmen selling from home and pretending to be private sellers. The lay-by 100 yards from my house is ALWAYS home to several cars with sale signs and the same mobile phone numbers and I know of one house on the edge of a council estate that NEVER has less than 5 cars for sale on the drive, the guy owns a garage FFS!!
  • Shinyshoes
    And perhaps they should target those dodgy lookin' hand car wash "firms" that are on every bloody corner staffed by people whose contributions seem unlikely to find their way to the British Exchequer. Oh, sorry, apparently that's too much trouble.
  • harryh
    @dick, Yes you are a dick, sir. Keep your nose out of other peoples business.
  • SUSIE
    hmrc can find out details of every sellers sales on a site called terrapeak (owned by ebay) its a research tool promoted by ebay , theres a monthly fee of about 9.00 but once on it any one can put a sellers ID in and find out exactly how much the individual has taken each quarter - records cover the last 12 months , we use it for research on what goods sold for and it helps with buying - but on looking at the sellers section we were amazed that you could put another ebayers ID in and it brought up all transactions for them over the past year in 3 monthly sections , hmrc dont need to have any kind of root bot for this just 9.00 month to subscribe , a data protection violation if I ever saw one ,I can look round an auction room at my ebay rivals and I know exactly what there turnover is for the past 12 months !!!
  • Kiddy
    Wouldn't every one have to pay the real value of the products they purchase on EBay then.
  • bobsy
    If hmrc investigate all ebay traders then I have a feeling that eBay would eventually collapse or at the very least downsize. For any healthy economy to exist there has to be a 'black market economy' running in sync with it - if people aren't allowed to make that little bit extra and absolutely everything is taxed then I'm afraid that doesn't leave much room for consumer spending in the legal market - our government is involved in many 'black market' economies and itself reaps rewards . . . . I think they should go after the banks instead of joe bloggs trying to make a few extra quid so he can treat his kids to a few treats . . . it was the banks who stuffed the economy and yet the bankers are still living it up . . and still getting bonuses . . it makes me sick!!
  • bobsy
    oh and by the way ole . . you sound like a right wing tosser . . . I'd love to see you loose your job and support three kids on income support . . you have no idea how a lot of people are living these days . . hand to mouth . . . you should be ashamed of yourself for you are a squidgy little tossbag
  • phils g.
    I think you twats crying about paying your taxes should give up work if it hurts so much, you probably would work for free your that sad..This country is robbing every brit to the bone and you dumb brits stand by this crazy regime..Stand up to this rubbish, the tax goes somewhere for the really smart political and royals of this country, that does nothing for me unfortunately,,whilst william and harry got there sweet cars and houses im in a tent with a tin of beans,, your having a laugh man, im opting out delboy style,, I take nothing from them and we give nothing ..im with bobsy on this one,,this place has to many minimum waged , pay all your wages out and have a tenner for yourself left for the month twats under the thumb so much, there famous words..im knackered work today was hard, oh work tomorrow , oh well. great..brainwashed stupid brits are letting the team down bigtime. peace out bobsy, , ole , ole go see a doctor you need help.
  • Hoolio
    I know a way that anyone can get a sellers details from ebay just by them having at leasnt one active listing auction style that would not involve them having to make a test purchase. Obviously, I will not put it on this website or everyone will start doing it. But it is easy and having sold privately on eBay and being the sort to research everything and learn all the tricks (legal ones) I found out about it. It would work perfectly with terapeak so that they could look at the revenue and get any listed telephone number and address and name. It would take literally seconds and only need an email address.
  • peter
    you people really need to get out more................
  • WestIsFinished
    because the uk economy is finished, therefore the UK GOV is screwing its own people, and allowing immigrants to take advantage of the system. My suggestion? Get the fuck outta the UK and move to China or Russia. At least in them countries you get NO benefit, you either WORK or you die. There is no benefit entitlement system, however in the UK with BIG GOV, there is entitlement system and if you do not work you have benefits. So how can an economy such as the UK exist? And why does the UK people are so WEAK and obay its masters? Maybe because the UK ppl are pussies? And allow other people to rip them off? I give you a clear example, if 10000 in the uk refused to pay tax and refused to give the tax man the money. They will change the rules, because they cannot put 10000 people in prisons. Thats the only way you can redeat the corrupted political and bankers. Because at the end of the day your all a slave, period.
  • June
    Remarkable! Its in fact awesome piece of writing, I have got much clear idea on the topic of from this piece of writing.
  • each p.
    I've been surfing online greater than three hours these days, yet I by no means found any attention-grabbing article like yours. It is lovely price sufficient for me. Personally, if all website owners and bloggers made just right content material as you did, the net will probably be a lot more helpful than ever before.
  • Paul
    HMRC doesn't need any sort of complicated 'robot' to gather information from eBay or Paypal, who are located overseas. All they need is to use their existing powers (powers that they have had for decades) to instruct any UK bank to provide them with the name and address of all the banks customers who have received Paypal payments over a certain de-minimus amount (say, over £4000, or more than 100 transactions in a year). Tax evaders assume that HMRC can't get information from eBay because they are located overseas, but fail to notice that they have a UK bank account which can be interrogated by HMRC to the 'n'th degree.

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