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Have You Received a Letter from HMRC About Online Sales?
If you’ve received a letter from HMRC regarding income from online marketplace sales, you may be wondering what it means and what you need to do next. HMRC has launched a One to Many letter campaign aimed at individuals who may not have declared all their income from online selling. This campaign is based on data HMRC has obtained from online marketplaces about sellers using their platforms.
Why Have You Received This Letter?
HMRC suspects that you may be operating within the hidden economy—earning money from online sales without reporting it. This letter is a prompt to bring your tax affairs up to date. It covers income earned up to the tax year ending 5 April 2023.
Do You Owe Tax on Your Online Sales?
Not all online sales are taxable. Here’s how to determine your tax obligations:
Selling Personal Items: If you are simply decluttering and selling personal possessions (e.g., old clothes, furniture, or gadgets), you likely don’t owe any tax.
Buying or Making Goods to Sell: If you purchase or create products with the intention of reselling them for a profit, HMRC considers this trading, and you may need to pay tax on your profits.
Selling High-Value Personal Items: If you sell personal possessions worth more than £6,000, you may be liable for Capital Gains Tax.
Regardless of your situation, you must confirm your position with HMRC.
What You Need to Do Next
If you have income to declare:
Carefully assess your situation to determine if you owe tax for previous years. If you’re unsure or need guidance on how to proceed, it’s highly recommended to seek professional advice to ensure you meet all HMRC requirements and avoid potential penalties.
If you do not have income to declare:
You must inform HMRC if there is no income to report. If you're uncertain about whether your sales are considered business-related, it's best to consult with an expert to ensure you're handling the matter correctly and avoiding complications.
We’re here to help you navigate the process and ensure compliance with HMRC. Contact us to discuss your situation in detail.
Proving Your Position Can Be Challenging
Even if you believe you do not owe tax, proving this to HMRC can be difficult. You may need to provide records, receipts, or other documentation to show that your sales were personal and not part of a trading activity. HMRC may challenge your claim, especially if your selling patterns resemble those of a business.
While not all sales are taxable, it is absolutely vital that you check the specifics of your situation with an expert before responding to HMRC. It's important to ensure that any statement you make to HMRC about not owing tax is accurate. If HMRC later finds that your statement is incorrect, it could significantly worsen the situation.
Equally, you do not want to mistakenly tell HMRC that you owe tax when, in fact, you do not. A careful, informed response is crucial to avoid unnecessary tax liabilities or penalties.
This is where specialist help can be invaluable. We understand HMRC’s approach and can help present your case effectively, ensuring you don’t face unnecessary tax liabilities or penalties.
What Happens If You Ignore the Letter?
Failure to respond within 30 days or at all will likely result in HMRC opening a compliance check. This could lead to serious penalties, interest on unpaid tax, and a more in-depth investigation into your tax affairs.
How We Can Help
As Tax Dispute Experts, we specialise in helping individuals navigate HMRC investigations and compliance checks. If you’ve received this letter and are unsure about your tax obligations, we can assist by:
Reviewing Your Sales Activity – We assess whether your online sales qualify as taxable income or personal transactions.
Communicating with HMRC on Your Behalf – We handle correspondence and provide the necessary documentation to support your case.
Minimising Penalties and Interest – If you do owe tax, we can help negotiate reduced penalties and set up manageable payment plans.
Providing Expert Guidance – We offer tailored advice to ensure your tax affairs remain compliant moving forward.
Don't face HMRC alone—let our experienced team guide you through the process and protect your financial interests.
Get in Touch
For professional tax assistance, get in touch with our experts now.