There has been some speculation on Tamebay over the past few days about whether eBay shares your trading information with the UK tax authority, HMRC. It’s some time since eBay has said anything definitive about this, so we thought we’d ask to find out the current situation. eBay gave us this statement:
“eBay is committed to providing a safe and fair marketplace for all buyers and sellers. We continue to work hard to ensure that businesses that trade on the platform are aware of their tax obligations. Additionally, data privacy remains important to us and information will only be released to Government agencies should there be evidence of wrong doing.”
So, reading between the lines, and having a bit of insider knowledge of eBay, I’d decipher this to mean “We do. But only when we have to.”
Certainly, it would be an administrative nightmare to send HMRC all trading details as a matter if course and eBay would strongly resist doing that but when provided with evidence of evasion, it would seem prudent that they provide information on a case by case basis. Needless to say, eBay will be in contact with HMRC on a fairly regular basis.
It really doesn’t matter a jot, what information eBay provides to HMRC. It is such an open marketplace anyway, that it would be reletaively simple to make a fairly accurate estimate of a seller’s annual sales with the information that is freely available on on the site.
13 Responses
Howdy Dan,
If I can make the point that eBay sell the sales data to a 3rd party whom is not a government organisation. So giving similar data to the HMRC is frankly the last of the concerns for well behaved businesses.
I’m suspecting that the HMRC would be smart enough and use a subset of Terapeak data to cross reference known accounts to remove them and then find accounts within a threshold range, then ask eBay for the extra details of sellers.
Which would ring true with your thoughts of “We do. But only when we have to.”
Matt
My thoughts, ebay should give all details to HMRC no questions asked as standard.
Im fed up of people getting away with not paying tax, thats how they can undercut by huge amounts not just a few quid either, if they had to pay PAYE and VAT etc etc, then the playing field would be more level and fair, I know some people can buy better and thats fine, but tax avoidance is a whole different ball game.
A question that comes to mind…Are Thai sellers who are mostly British Expats required to declare their earnings to HMRC?
It is just not possible for HMRC to investigate every Taxpayer every year(they just do not have the staff). The vast majority of Taxpayers put in the necessary Tax Returns and unless HMRC finds something wrong they are accepted. However if HMRC finds something wrong, or the taxpayer just gets picked for an investigation or perhaps is not putting in a Tax Return or is putting in a Tax Return but is not declaring everything and comes to the attention of HMRC only then will an investigation be carried out.
However if HMRC decides to do an investigation then they have the legal right ro obtain all necessary information and that includes obtaining from ebay details of trading. ebay will not handover all their information on everybody for the very simple reason that it is not necessary. However if HMRC requests(and remember a request from HMRC is really a demand) details of XYZ’s Trading on ebay then ebay will supply the details.
If ebay was to supply details of everybody trading on ebay it is unlikely that HMRC would be able to do anything with it. Indeed it is likely that HMRC would still contact ebay to request specific details of specific traders on ebay.
If I were running the country, I would have my tax department turn a blind eye to small scale sellers on the likes of eBay; the benefits to the economy as a whole, in stimulating trade, far outweigh the tiny amounts of tax involved.
I’d be more for targeting the likes of Rangers FC in respect of unpaid tax…..
Werent there also a whole lot of Chinese sellers booted from the site a little while back for tax/vat fraud?
Morning Dan
I know a little about this. For the Tax man to get information from eBay they have to get a court order. For the VAT man to get information they have to get a court order. The reason for this?
The accounts for eBay and the records for eBay are not held in this country. Legally by definition they are held in servers in the USA.
So the VAT man found an easier way to get a sellers information. They set up their own buying account. When they suspect a seller is trading fraudulently they simply buy something from them and ask for a VAT receipt. This gives all the information that HMRC they need to perform an investigation.
This is how the VAT man also found out about a certain chinese trader using a UK VAT number and charging VAT but not paying it. That ended in a court case.
The simple answer is, if you are khosher, you have nothing to to worry about. If you aren’t, then you have to be careful.
Sean
Tax dodgers on eBay is a significant problem. It makes business for larger sellers like ourselves have major issues in keeping sales going, we only need to look at the likes of comet who realise they need a presence on eBay- whilst others trade under different names to purposely keep under the VAT threshold. This is not only illegal but is putting other traders out of business who do everything by the book. The only thing to do is report suspicious sellers to HMRC and you can do so anonymously. I’m all for fair play and competition but most of these traders come on and cut the price by 30%! Out of that we have to pay paypal, eBay fees, packaging, and we’re left with nothing, The natural thing to do is raise prices but whilst others are under cutting you is difficult to keep sales going. This does need a serious look at.
… and ebay, paypal and HMRC make more money than anyone else. I think its more reason to make everyone trade fairly. They have already closed the jersey loophole which has caused a disaster for HMV.