Baker Tilly issues warning to online traders

By Anita Jaynes on September 8, 2014

Accountancy firm Baker Tilly has issued a warning to those trading on sites such as eBay or Airbnb, after a man was sentenced to two years imprisonment for failing to declare income from online sales.

John Woolfenden was convicted earlier this week at Bolton Crown Court on two counts of cheating the public revenue and one count of concealing or transferring criminal property. Woolfenden evaded paying £299,752.93 in tax whilst trading on eBay over a period of six years.

Commenting on the implications of the case, Matthew Sewell, Tax Director at Baker Tilly in Bristol said:

‘Using online auction platforms such as eBay or accommodation sites such as Airbnb can be a great way of earning some extra money, but if these are being used for carrying on a trade, it is the responsibility of private traders to disclose their earnings to HMRC and pay the correct amount of tax.

‘HMRC has recently become significantly more proactive in pursuing tax evaders and last year alone, it brought 915 prosecutions for tax crimes resulting in 716 convictions – more than double the number recorded four years ago. In total, 2,700 years of custodial sentences have been handed down by the courts for tax crimes since 2010.

‘This renewed focus on tax evasion is in addition to the significant resource HMRC is now putting into its well-publicised attack on the tax avoidance industry.

‘Back in early 2012, HMRC launched its e-Marketplaces campaign to encourage online traders to bring their tax affairs up to date on the best possible terms. This disclosure facility closed in September 2012 and raised more than £7.8m in tax.

‘It now looks as if the Revenue are getting tough on online traders and the outcome of this case very clearly highlights the dangers of failing to declare the correct income.’