Warning eBay Vinted Etsy Amazon Send Your Selling Activiity to HMRC

If you have a hobby income or trade of less than £1,000 pa, you can earn this tax free.  You do have the option to pay voluntary Class 2 national insurance contributions if you wish to boost your state pension.

If you have income above this level, you are required to file a tax return.

HMRC relies on your honesty to file returns, but they are starting to close the loop on tax ‘dodgers’.

Online Marketplaces Share Data with HMRC

We have warned about this before but as a reminder, online marketplaces like eBay, Vinted, Etsy and Amazon are required by law to collect information on sellers and supply this information to HMRC.  If you:

• Sell more than 30 items per year.
• Earn more than £1,700 per year.

If you do trade online, even as just a hobby, if you meet either of the above criteria, HMRC already knows about you and you should be filing a self assessment return.

Warning:  There are just 20 days to the current self assessment deadline.  If you have not done so already, you need to be registered for self assessment and get your tax return filed.

Penalties:

• Initial £100 fixed penalty just for filing late, even if there is no tax due.
• After 3 months, daily penalty of £10 per day, up to a maximum of £900
• After 6 months, additional penalty of 5% of the tax due or £300, whichever is greater.
• After 12 months, another 5% of tax due or £300, whichever is greater

Comment

There is no room for manoeuvre here.  Ignorance is no defence.  Even if you run a ‘hobby’ business make sure your tax affairs are in order.