This article is to make you aware of a new tax alert issued by HMRC which confirms they are targeting those who sell goods and services online.
The tax office is reminding people who buy or make goods to sell at a profit that they may be considered traders and required to pay tax on their earnings. However, certain exemptions do apply. For example, if you make fewer than 30 sales and receive less than €2,000 from those sales, you may be exempt. It is important to note that online sellers who make significant profits will be required to declare them via a self-assessment tax return.
This new tax alert comes as a result of the UK's adoption of the OECD Model Reporting Rules for Digital Platforms. Since 1 January 2024, digital platforms, like ebay and amazon, are required to make annual reports to HMRC about those who sell goods or services through them. Although this information wont actually be available to HMRC until January 2025, it is important that if you do have trading income to report that you take action now and before you are contacted by HMRC as this will ensure you are compliant and mitigate any late payment interest and penalties which might otherwise apply.
If you require any assistance in reviewing your online trading activity and/or reporting your trading income if required, please contact us.
