WARNING TO ONLINE TRADERS TO GET THEIR TAXES IN ORDER
Lee Bradley, Tax Director at Swansea accountancy firm Bevan & Buckland, said a significant number of the firm’s clients now sell through online marketplaces.
“We have seen a large increase in new businesses selling online via platforms such as eBay and Amazon” he said.
“The VAT/tax rules can get quite complicated especially when you start to sell to the EU or further afield (for example, in the USA). We have been dealing with a lot of queries from online clients and have become very knowledgeable in this area.”
The new powers are not aimed at penalising occasional online sellers, but set out to make sure online business traders pay their taxes. However, HMRC has not stated at what point a casual seller becomes a trader liable to pay tax. It has been reported that 14,000 online traders have received tax demands – some, according to The Telegraph, with profits of just £100.
Others have made a substantial profit online. One of the most high profile convictions so far was online trader John Woolfenden, who was jailed for two years late last year. He sold DVDs, CDs and games through sites including eBay, with nearly £1.4 million passing through his online bank accounts over a six-year period.
When completing your own accounts, it is worth remembering that any earnings exceeding the annual personal allowance of £10,600 are taxable, as long as they are regarded as profit from a business.
Above all, it is important to speak to an accountant and make sure you are well informed. “As with any law, not knowing is not a defence,” said Lee.
Please get in touch if you would like to discuss any aspect of tax and online trading.
If this applies to you please contact Bevan & Buckland, or Lee directly using the details below, as soon as possible.
Bevan & Buckland Accountants Swansea Tel: 01792 410100
Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666
Bevan & Buckland Accountants Pembroke Tel: 01646 682383
Bevan & Buckland Accountants Carmarthen Tel: 01267 233115
Bevan & Buckland Accountants St David’s Tel: 01437 720352
Bevan & Buckland Accountants Cardiff Tel: 02920 459960