Traders who plan to use eBay to sell goods this Christmas have been warned to register with HM Revenue & Customs before doing so, or face a £100 fine.

Enquiries by UHY Hacker Young to HMRC have confirmed that any income from trading online, irrespective of the size of the sum, will require a notification of self-employment, even if the trader falls below the income tax threshold.

HMRC will be able to issue a £100 fine if casual traders fail to register. For individuals who are already taxpayers, or who generate profits that exceed the personal allowance, then liability may arise to income tax and national insurance.

‘You are allowed to sell personal possessions online without notifying HMRC, but if goods are purchased with the intention of selling them at a profit, you are trading and you must register and possibly file a tax return,’ said UHY Hacker Young partner Derek Levy.

Posted: 12|1|06 at 5:59 pm. Filed under: Auction News.