HM Revenue and Customs (HMRC) have announced that they are turning their attention to eBay traders and continuing to target tradesmen (especially those in the home improvement trade, such as electricians and plumbers) in a bid to discover under-declarations of income.
So far, the campaign targeting plumbers has yielded nearly £4m and ten plumbers have been arrested. More than 1,000 cases have been prepared in which underpaid tax has been alleged. These cases will require only the ‘balance of probabilities’ to show tax evasion. In criminal cases (tax fraud), the criminal burden of proof applies, but a conviction leaves open the possibility of asset seizures under the Proceeds of Crime Act 2002. HMRC is said to be planning more arrests.
Commission-only salespeople are also to be targeted.
HMRC will use specialised software to detect and identify online traders.
If you become aware that you are under investigation by HMRC, contact us for advice.