Online eBay sales traders are the latest group to be targeted by the HMRC against tax evasion.
People who trade on websites such as eBay have until June 14 to tell the HMRC that they will take part in the scheme, and until September 14 to give details of the tax owed and to arrange for payments.
If they meet the deadlines, some will receive no penalty with most receiving a penalty of no more than 10pc of the tax owed, the Revenue said.
After September 14 the HMRC said it would investigate people, “using information pulled together from many different data sources”, those who have failed to respond.
“The department has recruited additional investigators and will pursue those who have failed to declare their earnings and pay up,” the taxman said.
Penalties of up to 100 per cent of the tax owed or even a criminal investigation could follow.
The bad news is that any individual who regularly acquires or makes items and then sells them online for a profit should take note – you’re likely to be considered an online trader by HMRC and you should disclose any profits you make on your tax returns.
The good news is that anyone simply selling off the occasional personal item or that you no longer want is unlikely to be trading.
The other bit of good news is that tax is only owed after you have accumulated £8,105 of profits in a year. Ie the amount of money that you make net of the cost of purchasing your goods.
So for example if you sell £15,000 of goods on eBay and they cost you £10,000 to buy- then your net profit is £5,000 and if you have no other income, you should be in the clear as far as the taxman is concerned.
Traders who want to take part can complete a notification form at http://hmrc.gov.uk/campaigns/notify.htm