In P Kaur v HMRC [2016] TC06210, the First-Tier Tribunal upheld HMRC’s penalties, finding that Ms Kaur was subject to VAT on her eBay business and had failed to notify HMRC of her obligation to be registered.
- HMRC conducted a review into Ms Kaur’s affairs in 2015, looking at 2010 to 2015.
- Ms Kaur stated that she was not self-employed in that time and also at one stage stated she did not have a PayPal account.
- Ms Kaur later stated that she made no profit from her eBay venture and as such, kept no paperwork or accounts.
HMRC reviewed the feedback postings on Ms Kaur’s eBay account. There were 20,574 feedback postings in the period and they showed turnover of £278,000 for the period from June 2010 to July 2011:
- Based on this review, HMRC established that Ms Kaur should have Registered for VAT on 1 December 2010 and that she ceased trading on 17 July 2011.
- HMRC raised an assessment of £27,632 and issued a Failure to notify penalty of £14,507, which was reduced to 25%, £6,908 on Review.
The taxpayer appealed, stating that the assessment did not include VAT she had incurred and did not take account of the postal charges included in the turnover.
The FTT found in favour of HMRC and did not change the penalty:
- The taxpayer had no evidence and maintained no business records, despite having a turnover of over a quarter of a million pounds.
- HMRC's assessments using customer feedback were based on its Best Judgement.
- There is likely to be more turnover not considered as it is likely that not all buyers left feedback. This is in the taxpayer’s favour.
- There was no Reasonable excuse.
Links
External link: P Kaur v HMRC [2016] TC06210
Wouldn’t it be great and think how much TIME it would SAVE you if someone:
- READ all the latest tax news, case decisions, new legislation and articles in tax and then summarised them for you?
- Only alerted you to things that are RELEVANT to you?
How about if that someone also:
- Updated those summaries in REAL TIME for you
- ADDED examples, planning points, toolkits and calculators, and
- Linked all that information together and also provided you with CPD?
Thousands of firms of accountants and advisers are already using www.rossmartin.co.uk as their primary TAX resource.
At a cost of just £1 per day, it’s a no brainer: FREE up your MIND and your TIME (and your wallet).
And...we run our Virtual Tax Partner support service, if you need assistance with a particular query or technical issue.
