HMRC information suggests there are significant numbers of people who obtain income which needs to be returned.
Thousands of people who sell goods online will be monitored by web robots as part of HMRC’s e-marketplace campaign.
Individuals who are already compliant with their tax returns and declare income from such activities are not at risk. However, anyone conducting high value trades or selling repeatedly without declaring to the taxman will be under the spotlight.
Derek Allen, tax director at ICAS, the professional body of CAs (Chartered Accountants) said: “HMRC’s web robots will map information that indicates online trades. Big brother is watching. It will be less painful for anyone in doubt to come forward rather than waiting for HMRC to catch up with them. The tax risk areas include income tax, capital gains tax and if VAT was not accounted for in sales.
“At this stage HMRC is more interested in getting it right for the future, but if people wait for HMRC to come to them it could be that any money owed further back could also be investigated.”
The number of people who have side-line businesses through online trading has risen as sites such as eBay and gumtree have grown in popularity. EBay recently reported that over 1 million people use online sales on the site as their first or secondary source of income.
Allen added: “HMRC information suggests there are significant numbers of people who obtain income which needs to be returned. However, there may be expenses and capital allowances which can be set against the income. It is vital that people that fall into this category obtain the right advice to make sure their affairs are in order before HMRC catch up with them.”