HM Revenue & Customs' (HMRC) e-marketplaces campaign was aimed at those using e-marketplaces to buy and sell goods as a trade or business who had not disclosed their income or paid the taxes due. This closed on 14 June 2012.


  • E-sellers have from 14 March 2012 to 14 June 2012 to notify HMRC of their intention to make a disclosure.
  • Disclosure and payment must be completed by 14 September 2012.

Professional advice needed?

  • E-sellers may find it an advantage to obtain professional advice before making a disclosure - they will need to work out how far they need to go back. HMRC indicates up to six years, but there may be reasons for disclosing fewer years.
  • HMRC has served online auction houses with notices under s18A TMA 1970: these require the sites to disclose names and addresses (of members/users) that they maintain on a register to HMRC via a spreadsheet.

The e-marketplaces campaign is aimed at those who are actively trading and so individuals selling off surplus second hand household items, toys, clothes etc and not actively trading will not be targeted by this campaign.

What is a trade?

“Trade” is often defined for tax as "any venture in the nature of trade".

Over the years the courts have taken this to include "a trade, manufacture, adventure or concern in the nature of trade". The term is “commonly used to denote operations of a commercial character by which the trader provides to customers for reward some kind of goods or services".

Many different activities are described as trading. The “badges of trade” are a set of tests that are often used by the courts as a reasonable way of establishing whether a transaction was trading or capital in nature.

The badges of trade:

  1. The subject matter of the realisation.
  2. The length of the period of ownership.
  3. The frequency or number of similar transactions by the same person.
  4. Supplementary work on or in connection with the property realised.
  5. The circumstances that was responsible for the realisation.
  6. Motive.

For example:

Jill sells her child's old clothes on E-bay as her child grows out of them. She does not make a profit because the second hand selling price is less than the cost to her of the clothes when new - she is not trading.

Jill buys up toddler clothes from charity shops, car boot sales and jumble sales, she then cleans and irons them and sells them on E-bay to make a profit - she is trading.

Links: HMRC's e-marketing campaign