Tax crack down for internet companies

Posted on: Fri, 10/06/2016

A crackdown on tax evasion may mean that internet companies will have to provide more information on people and businesses who sell online.

HM Revenue & Customs want to target businesses that have not registered for tax, and also individuals who do not declare the money they make online. Known as “hidden economy” it is believed to equate to £5.9bn a year in tax.

Existing laws allow HMRC to access certain data but they want to broaden its scope. Therefore a 12 week consultation on extending its powers to collect extra data from firms and individuals, has been set and is due to run until mid October. In the document published online, HMRC said data played a key role in enabling them to detect those not paying tax.

Although firms have not been named, sellers on internet marketplaces such as Gumtree and eBay could be among those targeted.

The consultation document states “Data can be particularly powerful when it is collected from third parties who facilitate trade, either between businesses, or between businesses and consumers, This is because they can provide information in bulk about the activity of large numbers of traders, and because third party data can be used as an independent check against the data that taxpayers themselves report to HMRC.”
Individuals will not be targeted

HMRC stressed it would not target individuals who sold personal possessions, only businesses that failed to pay tax owed. HMRC would not seek to find out what people bought online, but what was sold and not declared.

“Effective tackling of the hidden economy will ensure a level playing field between those businesses and individuals who comply with their tax obligations and those that do not,”

Those who were tax compliant “should see little or no impact”.

Tax crack down for internet companies
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