Thousands of families making extra income on Airbnb and eBay face shock tax bills in HMRC crackdown
AIR Bnb hosts, eBay sellers and people who make money online could be hit with surprise tax bills and even fines in a crackdown on extra cash earned on the web.
HMRC will be using a new program to find those who haven't declared the cash they have been earning online and giving them just three weeks to make amends.
The new computer system will reportedly be used to find people who have failed to declare their extra income - with the program sweeping online sites including Etsy and eBay.
Anyone - including those who rent out rooms on Air Bnb - must declare the income by January 31.
HMRC is hoping to raise millions of pounds in extra revenue through the crackdown.
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But experts have highlighted concerns that some might not realise they are expected to pay tax on the extra cash.
Justin Modray, director of advice firm Candid Financial told the : "The taxman needs to take a common-sense approach and understand that many people who have recently signed up to these websites might have not realised that they need to pay tax or may have been confused by the rules."
Rules around what qualifies as taxable income are confusing. As a general rule, those selling unwanted possessions on eBay are unlikely to be liable for tax.
But anyone selling on a regular basis - like setting up a shop on Etsy and Amazon Marketplace - would be considered a small business and tax would need to be paid.
Anyone found to owe tax or who has failed to submit a self-assessment return by the end of January faces a £100 fine.
In April, new rules will allow online marketplace sellers to earn £1,000 before they have to declare anything to the taxman.
There will also be a separate £1,000 tax break for those that earn money from their home, for example, by renting out a room, their driveway or making money selling storage space.
A HMRC spokesman said: "The majority of traders in the sharing economy are already declaring and paying their tax just like other taxpayers.
"The wealthiest one per cent pay more than quarter of all income tax with HMRC ensuring everyone pays their fair share.
"When we have evidence of tax going unpaid we take steps to put that right and that applies right across the economy."
An Airbnb spokesperson said: "Airbnb hosts want to pay their fair share of tax and we want to help. We remind hosts to check and follow tax rules, send email reminders during tax season and have downloadable transaction histories for hosts.
"We also include helpful information on our responsible hosting page."
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