Leading audit, tax and business advisory firm Blick Rothenberg has warned that eBay sellers and other online traders could face significant tax demands if they fail to register for self-assessment by the end of the year.
Under new reporting rules, platforms such as eBay must provide HMRC with details of sellers using their services in 2024, reports which must be submitted by 31 January 2025.
Fiona Verney, partner at Blick Rothenberg, said: “Now, with winter coming, we are more than halfway through the first year of online sales platform reporting regulations. HMRC will compare a seller’s reported income with self-assessment records, so they may face Anyone who does not declare their income faces significant penalties of between 20% and 70% of the tax due – plus interest.
The registration deadline for self-assessment of trading income in the 2023/24 tax year was officially 5 October 2024. However, Verney says sellers who missed this date should come forward: “There are unlikely to be negative repercussions if they do.” Submit their tax returns by January 31, 2025.” Failure to notify HMRC of a tax liability makes it “very easy” for HMRC to identify discrepancies, especially in light of the new reporting regime.
Small sellers who receive gross trading receipts of less than £1,000 in a tax year benefit from a trading allowance, although they must still include their income on their tax returns. Those earning more than £1,000 should seek professional advice to determine whether they are running a trade or liable for capital gains instead.
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