Revenue taps into rise of the robots
First Law: a robot shall not harm a human, or through inaction allow a human to come to harm. Their bank balance, however, is fair game under the Inland Revenue’s new initiative targeting unpaid VAT on online sales income.
Early statements of intent to recover unpaid tax on online sales, initially mooted last September, have been followed up by the introduction earlier this year of a £250,000 ‘web robot’ – a specialised search engine whose mission is to track eBay and other online sellers who have carelessly omitted to register for – and therefore, pay – VAT.
If you’re just trying to shift those unwanted Capo di Monte figurines or recoup some of your teenaged outlay on Dungeons and Dragons modules, there’s no need to panic – the robot’s priority is to identify high-volume traders who, rather than taking advantage of eBay to de-clutter their cupboards, are making a working living – in some cases, a very good one – out of online auctions.
According to the National Audit Office report HM Revenue and Customs: VAT on E-Commerce, the Revenue’s target is to recover an additional £1m per year – to put that into context, £1bn tax on e-commerce transactions was collected from properly registered businesses during 2005-06 – as well as identifying the expected tens of businesses that have income over the VAT registration threshold of £60,000.
Some estimates indicate that as many as 70,000 people now make a quarter or more of their income from online selling, perhaps unsurprisingly when it’s considered that e-commerce has more than trebled in value since 2002 – taking figures again from the NAO report, from £6.4bn to £18.1bn by the end of 2004 and higher still for 2005.
By April 2010, that figure is expected to have increased tenfold to around £60bn, so it’s no shock that the Revenue is attempting to put countermeasures in place now to prevent its share dropping through cracks in the system.
The web robot, of course, is only part of the ongoing strategy to improve regulatory control of the e-commerce sector, addressing what might be seen as one of the softer targets in an industry complicated by issues of offshore trading, invisibility of transactions, and in many cases intangibility of product – digital media such as downloaded music and films being a prime example.
Perhaps even more than fingering the outright lawbreakers, the challenge facing the Revenue is to identify areas where the system may legitimately be exploited to their detriment. Which is good news, of course, for the amateur eBayer who wants nothing more than to quietly flog a couple of Star Wars action figures or those mint copies of 2000AD; it’ll be some time before the advanced fibre-optics of the taxman’s own R2-D2 focus on such small fry as you.
Or will it?