A Manchester based online trader has just been jailed for failing to register as self employed and pay income tax and VAT.
According to TheBusinessDesk he wasn’t a casual trader, having turned over some £1.4m and owing a touch under £300k in unpaid taxes and interest.
Apparently he was caught by HMRC’s efforts to stamp down on unregistered traders on e-marketplaces. HMRC are actively trawling the net and sooner or later will catch those who have failed to declare their income… particularly I guess, those who are turning over substantial sums.
It’s a timely reminder that if you started out as a casual seller clearing out the house and have inadvertently stumbled into selling as a business (i.e. have you bought something to sell?), then it’s time to get on the phone to HMRC and register. If you go to them voluntarily they’re generally quite nice and helpful. If they come knocking on your door it probably won’t be a pleasant experience.
10 Responses
Paying VAT and corporation Tax is painful, but more painful, frustrating and downright annoying are those traders like this Manchester based online trader who are able to uncut legitimate traders by cooking the books.
Here’s a better link for the news story >
https://www.manchestereveningnews.co.uk/news/greater-manchester-news/millionaire-businessman-who-made-fortune-7709800
he’s still trading on ebay, his shop listings with his business (lol) contact details are still live
It’s a shame they don’t have the resources to go after ALL unregistered businesses on eBay regardless of size. Or, find a way of doing eBay for allowing them to operate on the site illegally.
At the very least HMRC should find some way of forcing eBay to have a clear way for unregistered business sellers to be reported (to eBay) by members and ensure they act on those reports.
VAT/Tax fraud is pretty common on eBay/Amazon, there are so many simple solutions to the problem, but neither HMRC, eBay or Amazon seem to want to address the problem with a proper solution. Very annoying and frustrating as a legit business to be regularly undercut on prices by these rogues.
For example, once they reach the annual VAT threshold for sales on their selling account, they can no longer withdraw funds until a verified VAT number is supplied, or that VAT is withheld by eBay and they claim it as a credit on their VAT return. Might not stop the problem, but it will make it more difficult for them to operate.
Unfortunate to see that HMRC are only targeting UK entities and totally ignoring the foreign based VAT fraudsters (NETP foreign companies not registered for VAT) in China etc who are a growing and significant problem on Amazon and Ebay
Yep the Chinese sellers are the main competition for me and even starting using FBA but on the basis HMRC are pretty toothless for UK traders I aint holding my breath for them being able to combat foreign traders!
Okay they got this guy but it wasn’t exactly a difficult catch was it !
Its not just Chinese sellers doing this, we have a competitor from another EU country, who exceeds the UK VAT threshold every month, and their not registered for VAT.
Add on top of this the lost corp tax, income tax of lost jobs, paye, benefits saved, and the money/wealth sucked out of the UK economy.
I would estimate this is probably costing the UK economy billions, and tens of thousands of jobs, no wonder we have a deficit.