Don’t land on HMRC’s naughty list this Christmas

Melissa Thomas, Director said:

New guidance released by HMRC may impact those who try and sneakily sell unwanted Christmas presents through an online market place or social media.

HMRC now expect you to inform them when you sell online, even if no tax liability arises from it. You could find yourself on their naughty list if you don’t inform them of the income you gained from selling those ugly PJS from Auntie Mabel, the gag-worthy scented candle from your bestie, or that unnecessary kitchen appliance from the other half.

HMRC’s guidance says that gifts or services that individuals may receive from selling personal possessions or goods are also something they need to be informed of.

If you are caught, HMRC will do far more than put a lump of coal in your stocking. You could be looking at a hefty bill if you have earned enough to incur a tax liability without paying your dues or simply not informed them of the transactions.

Melissa added:

The guidance clarifies that personal possessions include clothing, ornaments, kitchen equipment, tables and chairs, jewellery, computers and phones.

Perhaps this additional reporting requirement could see a resurgence in old school car boot sales and garage clearances as people avoid online market places and social media altogether?

However, this doesn’t mean they are off the hook for tax liabilities! Regardless of if you are selling on or offline, you should still inform HMRC of your earnings.

It’s far less trouble to fill out your tax return and include the £15 you got from selling that unwanted make-up kit then have to explain yourself to the revenue later. Bare in mind tax free allowances are available, but you should check with a tax advisor or HMRC’s website.

Would you like to know more?

If you would like to discuss any of the above, please speak to your usual Blick Rothenberg contact or Melissa Thomas using the form below.