British citizens have been alerted to the possibility of facing a large tax charge if they fail to report their income to HMRC when selling their previously owned goods online.
This New Year, HM Revenue & Customs implemented new regulations to combat tax evasion through side gigs.
From January 1st, websites including Vinted, Depop, Etsy, and eBay will have to gather and submit information to HMRC regarding users’ income.
People who sell their unwanted Christmas gifts or their used clothing, accessories, purses, and books may thereafter be subject to fines.
Individuals who make sales outside of their regular jobs are eligible to earn an additional £1,000 in income per tax year; however, if this amount exceeds the tax-free threshold, they must disclose it to HMRC. If this isn’t done, folks can end up with a big cost.
Individuals who currently disclose their earnings to HMRC will be unaffected, and there will be no requirement to record earnings below £1,000.
The Times was informed by Miruna Constantin of the accounting firm RSM UK that HMRC is hunting for people who escape paying taxes.
She stated that there would be penalties for “failing to comply with reporting obligations” and that, in the “worst” circumstances, noncompliance with HMRC could result in the payment of 100 per cent of the outstanding tax.
HMRC says the regulations will help taxpayers ‘get their tax right the first time’ and ‘bear down on tax evasion’.
The following online marketplaces are impacted by the new regulations: Uber, Fiverr, Airbnb, Vinted, Deliveroo, Etsy, and Depop.
Additionally, HMRC plans to contribute close to £37 million to the project.
Social media users have expressed their displeasure with the new regulations by pointing out how many products are currently sold at a loss.
A commenter on ‘X’ stated: ‘HMRC taxes people on their Vinted sales proceeds since they consider it to be self-employment. Given that most consumers will really experience a minor loss rather than a profit, in that scenario, shouldn’t they be accounting for the original purchase price of such items?
Another said: ‘So, to compensate for HMRC ignoring tax-dodging millionaires, from today, HMRC is going after people trying to make a few extra quid selling things on online marketplaces like eBay and Vinted. If you wanted to sum up the state of the UK right now, this does it perfectly.’
Mike Parkes, Technical Director at GoSimpleTax, said: ‘Selling via platforms like Vinted, Etsy, and Depop can be a great way to earn an extra income, and often that falls below the casual income bracket. Yet for some, it can quickly add up, and those earning above this will still need to pay tax on what they earn.
This is unacceptable, particularly when the products were originally purchased with taxes paid; nonetheless, sellers remain unaffected.
Selling as a business should result in taxes because you are a business, but individuals who are selling items for which they have already paid taxes shouldn’t be taxed because that would mean they are paying taxes twice, which is something we frequently do with things but people don’t think twice about. On the other hand, we are constantly being duped by the government and HMRC.
Many people on eBay are listed as business sellers but aren’t a business. They collect junk and sell the junk to buy more junk, but once they’re over a certain threshold the HMRC will clobber you. They certainly wouldn’t make a profit, but busybodies like HMRC have nothing better to do with their time apart from stealing from us and making people’s lives a misery.
THE MONTHLY MOSQUITO 