HMRC stay silent over eBay stings

11 July 2011

data-tngLast month the HMRC announced they'd be focusing their attention on eBay and other online marketplaces; specifically, they said they had the means to find tax evaders by monitoring websites with “web robot” software that used targeted information about specified people and companies.

We wondered out loud how are HMRC could possibly go about matching eBay usernames to Self Assessment records, since HMRC themselves stated categorically that they were not obtaining any personal details directly from eBay. Was it some elaborate ruse to frighten taxes out of the public? Not according to the spokesperson Bitterwallet talked to. They didn't like us very much when we suggested that, or when we queried whether they were acquiring personal details in breach of the Data Protection Act.

Specifically, their exact words were that it was a “ridiculous” suggestion and such speculation would make HMRC “animated and annoyed”. In fact it would make them “extraordinarily annoyed”. They then threatened to set their lawyers on us.

That's where avid Bitterwallet reader Donald took up the story, when he submitted a Freedom of Information request to HMRC:

Please could you provide details of exactly how information identifying users is linked to self assessment records, if they are not being provided by e-marketplaces? I do not sell on any e-marketplaces, however I am concerned that there could be a breach of the data protection act during this process.

I am interested in how a "web robot" could possibly link users of an e-marketplace to their tax self-assessment records on the connect system, using only public information with no additional information provided by the
e-marketplace websites in question.

Unfortunately, the Freedom of Information Act stipulates that organisations can refuse to provide information that may be considered commercially sensitive or against public interest - and so HMRC refused to answer the question:

Whilst it is in the public interest to be open and accountable for the relevance, robustness and value for money aspects of our systems, and to assist compliance by helping the public understand the effect that HMRC's law enforcement activities can have, we also need to consider the operational sensitivities involved... it is likely that some harm would occur to the revenue if we were to reveal too much detail. Criminals are known to research our capabilities in order to make concerted attacks on the revenue.

So we're still none the wiser: as Stuart suggests, the most likely way HMRC could catch individuals on eBay is by making a test purchase by requesting the user's details from eBay or PayPal.

TOPICS:   Tax

9 comments

  • Steve
    With the massive increase in eBays fees this month too will most sellers be switching back to car boot sales?
  • Alexis
    Word the FOI request in such a way that they have to answer yes or no. Just ask if it is possible for HMRC to obtain personal details from ebay alone. If they come up with the same gumpf, we can assume it is not possible at all (like TV detector vans which don't exist). Or just ask them if they've stopped beating their wife yet?
  • colin
    Not paying taxes is a crime is it not? The DPA doesn't apply if the information is being used for the prevention or detection of crime, so how would it apply if they are getting the details from ebay or paypal?
  • wombat
    @Colin: If HMRC have evidence of a crime they could request details; however they have no right to every sellers information just because some of them my be evading taxes.
  • The B.
    @wombat, following on from that train of thought presumably they have a lower limit of on the amount earned so they would just require anyone processing over x amount which would be a smallish percentage of all UK ebay users? Reallistically though this would have to be via paypal surely? You could put fake details into ebay but your bank account would have to be legit to extract the money.
  • colin
    @ wombat - thats not how I understand it, its not just for the detection of crime but prevention too, so therefore they don't need to show any evidence of a crime. Do HMRC even need to follow the DPA, lets not forget they have more powers than the police, they can enter your home without a warrant for example.
  • Yue
    Shame they spend money on going after those that evade a few pounds here and there and not go for the companies evading millions. I can't relate to our government's view of taxing the many for little and ignoring the few that remove a metric fucktonne of money out of the country with us footing the bill with these austerity measures that are unnecessary and ideological. Rant over.
  • Mr D.
    How long have acts and statutes been enjoying the force of law without my consent??? Oh yes thats right, we are obliged to pay taxes. SSUCK IT UURRP!
  • Colin G.
    HMRC cannot enter any premises without a warrant, consent or under section 18 of PACE. It's simply rumour that says otherwise. Some individuals make a fortune on ebay and pay their tax on the COMMERCIAL sales/profit they make. Why should others who make a profit on commercial sales NOT pay tax, when all other traders do? There is a big difference between someone trading on ebay (the targets of HMRC I would think) rather than someone clearing their house or garage full of items they have paid for and simply selling on. If this is you, you need no worry is there?

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