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HMRC Tax Crackdown Targets Ebay Sellers

Anyone running a successful eBay empire could be faced with a substantial tax bill, according to new UK tax rules.

The crackdown would affect people who run online sales businesses through sites such as eBay and Amazon without declaring their earnings to the taxman.

A consultation paper from HM Revenue & Customs (HMRC) outlines plans to change ‘HMRC’s data-gathering powers to obtain additional data in order to tackle the hidden economy’.

While no companies are mentioned by name, the paper will ‘directly affect businesses who act as intermediaries or provide electronic payment services’ which would include site such as eBay, Paypal and Etsy.

The new rules would require online retailers to hand over data in bulk if someone is suspected of not declaring an online business interest.

The rules would also apply to people who rent out their property on Airbnb as well as those who make money from apps sold on Apple’s App Store and the Google Play store.

According to HMRC, £5.9bn of tax revenue was lost in 2012/12 by people running online businesses without declaring their earnings, in what it describes as the ‘hidden economy’.

The new powers would reportedly enable HMRC to raise £860m over the next five years.

Along with details of transaction amounts, the data collected could also include names and addresses of sellers and service providers, raising concerns over data protection and privacy.

The closing date for comments on the consultation is 14 October 2015.

(Image credit: PA)