By Lyndsey Hall
This week, Cameron announced the latest move by HMRC to battle tax avoidance and the “hidden economy”. The Revenue will be granted additional powers to access information from business intermediaries (for example, eBay and Gumtree) and electronic payment providers (such as PayPal and WorldPay) although no specific firms have been named. The taxman will target businesses that have failed to register for tax, as well as individuals who fail to declare the money they make online, which HMRC believes could amount to £5.9billion a year in unpaid tax.
According to the consultation document published online: “Data can be particularly powerful when it is collected from third parties who facilitate trade, either between businesses, or between businesses and consumers. This is because they can provide information in bulk about the activity of large numbers of traders, and because third party data can be used as an independent check against the data that taxpayers themselves report to HMRC.”
The Revenue has stated that individuals who sold personal possessions would not be targeted, only businesses that failed to pay tax. So, if you sold your old clothes on Gumtree, or an unwanted Christmas gift on eBay, you’ve got nothing to worry about. But if you own a small business and thought that selling online without declaring your income could increase your bottom line, then you could be in trouble.
The business intermediaries that could be targeted include app stores and booking and reservation platforms, like AirBnB.
This is just the latest in HMRCs mission to crackdown on tax avoidance: the Revenue has also started monitoring the activity of those who use online marketplaces, like eBay and Amazon; as well as spying on individuals’ social media accounts; and earlier this month the taxman was given access to thirty different databases by HMRCs £80million Connect system.
What are your thoughts on HMRCs latest powers of investigation? Are they a necessary evil to help the country’s economy stabilise? Or, an invasion of personal privacy that could be used to a dangerous effect? Let us know in the Comments, or join the conversation on Facebook and Twitter.
If you liked this article, you may also like:
HSBC and PwC latest in tax evasion scandal
Tax defaulters beware of social media
Google Earth: HMRC’s newest tool in fight against tax avoiders