By DAVE RICHARDS

This week the taxman has announced it will catch traders who sell online and attempt to avoid paying tax. The new e-marketplace campaign has been timed to start in the Spring, and will focus on evaded income tax, VAT and capital gains losses that HM Revenue & Customs face when transactions take place.

The government has announced that clamping down on tax evasion is one of its key policies. The target of the new campaign is people who use eBay, Autotrader and classic-specific websites such as classiccarsforsale.co.uk. Use of these sites has rocketed recently as cash-strapped owners turn in any direction to raise funds during the on-going economic downturn.

HMRC has announced ‘there could be significant tax evasion which we need to assess’, though it has also stated that people who only sell a few items to empty attics and driveways are unlikely to be carrying a taxation liability. But people who buy goods to sell on, and those selling on behalf of others for commission, the HMRC advised, do ‘act as traders’, and added ‘they’re the same as if the trader opened a shop or market stall.

Online account information will be tracked to assess levels of trading, and where high levels show up, particularly in the same type of goods, the HMRC will assess records to see the quantity of trading and assess whether that trader is VAT registered.

Hotlines will be set up so that when the e-marketplace campaign launches, people can come forward and pay what they owe with little extra penalty. These amounts are described by HMRC as ‘the taxation owed, interest on the amount, plus a small penalty, typically 10 to 20 per cent of the amount owed’. Penalties are described as ‘depending on the level of taxation non-payment’ according to an HMRC spokesman.

Websites due to be targeted

www.ebay.co.uk

www.autotrader.co.uk

www.classiccarsforsale.couk

www.carandclassic.co.uk