Home Money Charities warn online retailers face ‘ticking time bomb’ over new tax rules

Charities warn online retailers face ‘ticking time bomb’ over new tax rules

0 comments
HMRC has been accused of not doing enough to make online sellers aware that they may need to start filing a tax return.

HMRC has been accused of not doing enough to make online sellers aware that they may need to start filing a tax return.

Sellers offering products through sites such as eBay, Vinted and Etsy are facing a “ticking time bomb” due to confusion over reporting rules that come into force in January, a tax charity says.

There could be ‘chaos and confusion’ because HMRC has allegedly not done enough to inform online sellers that they may need to start filing a tax return, the Low Income Tax Reform Group (LITRG) claims.

Web platforms will have to issue income reports to the tax authorities in 2025

Sellers and the tax collector will receive information based on calendar years, which will cover more than one fiscal year.

This could make it more difficult to calculate what tax is due and when.

LITRG also says there is a lack of a standard reporting format for websites, so sellers may receive different forms from different platforms.

Reports are also produced in January, one of the busiest periods for HMRC.

There was a great deal of confusion when the measure was announced, as many sellers mistakenly believed that a new tax had been introduced when in fact only the reporting rules had changed.

Sellers receive a trading allowance of £1,000 and any amount above this limit could be taxable if they are classed as a trade.

An HMRC spokesperson said: ‘We have recently published and promoted guidance for online sellers and run an extensive self-assessment campaign each year, reminding people to check whether they need to file a tax return.

“For people selling personal possessions online absolutely nothing has changed, so it is deeply disappointing to see this fear-mongering from LITRG.”

SAVE MONEY, EARN MONEY

5.09% cash for Isa investors

Boosting investment

5.09% cash for Isa investors

Boosting investment

5.09% cash for Isa investors

Includes 0.88% bonus for one year

Cash Isa at 4.92%

Includes 0.88% bonus for one year

Cash Isa at 4.92%

Includes 0.88% bonus for one year

No account fees and free stock trading

Free stock offer

No account fees and free stock trading

Free stock offer

No account fees and free stock trading

Flexible ISA now accepting transfers

4.84% cash Isa

Flexible ISA now accepting transfers

4.84% cash Isa

Flexible ISA now accepting transfers

Get £200 back in trading commissions

Transaction fee refund

Get £200 back in trading commissions

Transaction fee refund

Get £200 back in trading commissions

Affiliate links: If you purchase a product This is Money may earn a commission. These offers are chosen by our editorial team as we believe they are worth highlighting. This does not affect our editorial independence.

You may also like