eBay traders warned to register with HMRC

People running an online business via auction website eBay are being warned to check if they need to register as self-employed.

HM Revenue & Customs (HMRC) has produced a new online guide for people who trade online. The guide outlines the rules for people who trade online for a profit, as opposed to those selling low value items from home.

HMRC has warned that you must be registered if your online activity involves:

Selling goods that were bought with the intention of re-selling them, selling items made yourself for a profit, selling or buying on behalf of others for financial gain or receiving payment for a service.

Anyone running an online business should register for VAT, and may need to pay income tax, national insurance contributions, and fill out a self-assessment return. E-traders starting a new business must let HMRC know within three months of starting trading.

It is estimated that around 68,000 people make all or a large proportion of their living through selling items on eBay.

HMRC is reportedly using a robotic computer software programme called Xenon to scan internet sites looking for people making a lot of transactions on auction sites.

According to the BBC, 200 people registered as online traders in the first two days of HMRC’s campaign to alert e-traders of their legal requirements.

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