Do you use Ebay, Airbnb, Paypal, Google and Apple app stores, or any similar trading website?
Then government plans to further extend HMRC’s powers will affect you.
In 2013 HMRC were given authorisation to access information from our credit and debit card transactions. Now they want to be able to obtain information from internet companies about our online buying and selling patterns. The new rules license the Tax Office to gather addresses, names and the financial details of any business using trading websites like Ebay. They want to see who is actually operating a business and generating income online – and to make sure that they are paying the requisite amount of tax. This doesn’t mean people selling the odd bit of furniture or a box of DVDs a couple of times a year!
HMRC thinks that we annually lose huge amounts of potential tax revenue because online traders are not paying their fair share of tax on their profits. In the next 5 years, they think that the application of these new regulations will generate over £860 million.
Paypal is owned by Ebay and has over 2 million British users, so we can see why the government wants access to their considerable amount of data. But it is the sheer size of the operation that worries some senior tax accountants, as reported by the Telegraph online. Current HMRC databases will need to be vastly improved to handle the capacity. There are also fears about inevitable privacy and security breaches during the process. Efficient administration is not something HMRC is currently known for.
None of us think that anyone should get away without paying the tax they owe – but do we want to grant the government easy access to every part of our financial lives without question?
