HMRC is to launch yet another campaign against people who evade paying tax.
Named the “e-
The campaign is due to start on 14th March 2012 when more information will be made available explaining how HMRC will carry out the campaign and how you can contact HMRC to come forward voluntarily if you think you have not paid the amount of tax you should have done.
As with other campaigns that HMRC have carried out such as the “Electricians’ Tax Safe Plan” started in February 2012 and the Plumbers campaign during 2011, if you come to HMRC voluntarily they will be more lenient than if the campaign ends and you are then found to be evading from tax. Large penalties have been given for people who were found to be evading tax after previous campaigns had ended and even criminal convictions have been given out in extreme cases.
If you sell a few personal possessions to raise some cash on sites such as eBay, you’re not trading and won’t usually need to pay any tax.
The following questions should help you decide whether you meet HMRC's rules for trading. You need to look at all 8 questions. If your situation is more like answer A than answer B in any of them, you are probably trading.
Questions to help you work out if you're trading or not
Question 1. How, and why, did you get the things you're selling?
Answer A: you bought them so you could sell them again to try to make a profit.
Answer B: you're selling personal possessions you don't want anymore, or things given to you or inherited.
Question 2. How often do you sell things?
Answer A: you make regular sales.
Answer B: you have only ever made one sale and you don't think you will make any more.
Question 3. How do you sell?
Answer A: by registering as a business seller or as an online shop with an internet auction site.
Answer B: when you have something you want to sell you advertise it, but you don't sell enough to make it worth setting up as a business user or shop.
Question 4. Do you change or improve the things you're selling?
Answer A: you mend or change the things you buy (that might include splitting things up into smaller quantities), so you can make more profit on them.
Answer B: you sell things as they are because you just want to sell them quickly.
Question 5. How quickly do you sell things?
Answer A: you sell things that you've only just bought and you're hoping for a profit.
Answer B: you've had the things you sell for quite a while.
Question 6. Are you running a business selling similar things?
Answer A: the things you sell are related to your own trade or business.
Answer B: the things you sell are not things you would sell in your own trade or business.
Question 7. How did you pay for the things you're selling?
Answer A: you had to borrow money to pay for the things you're selling.
Answer B: you were given them or you paid for them out of your normal living expenses.
Question 8. If you make the things you sell, do you charge more than they cost you to make?
Answer A: you try to sell them at a price that covers your costs and brings in a profit.
Answer B: you sell things that you make as a hobby and you only want to cover your costs.
After answering these questions and you think you are trading, contact us and we can help you become registered with HMRC, as well as give advice on running your business and ensure you are fully compliant with all trading rules and regulations.
C & GB Associates -
Tel & Fax: 01845 525502