HMRC have announced their latest campaign to target rule breakers and home in on tax evaders - the e-marketplaces campaign.  This campaign is for people who are trading online through an online marketplace, sometimes referred to as an online auction or online market to sell goods and services as a trade or as a business but are not paying the right amount of tax.

An e-marketplace is an online market, or online shop, where buyers and sellers trade with each other over the internet. They might buy and sell goods or services, or a combination of both. A separate company, a 'third party', runs most e-marketplace websites. They let you advertise or auction your goods or services on their website, and usually charge a fee for this service - either for using their site, the amount you sell your goods or services for, or both.

The campaign is not for people who only sell a few of their personal items. They are unlikely to need to pay tax as they are not trading. Further guidenance about whether people are trading or not can be obtained on the HMRC website at  http://www.hmrc.gov.uk/campaigns/emarket.htm.

If you trade online and you have not disclosed all your income, you can use the e-Markets Disclosure Facility (e-MDF) to enable any unreported income to be declared and the related tax paid. By making a disclosure under the e-MDF you may benefit as follows:

• you may only have to pay for a maximum of six tax years
• you can tell HMRC how much penalty you should pay
• you may be able to pay what you owe by instalments

If you owe tax in respect of anything else such as capital gains or rental income you can use the e-MDF to tell HMRC about that too and make a full disclosure.

If you wish to use the e-MDF to bring your affairs up to date you will need to tell HMRC by 14 June 2012 that you intend to make a disclosure and follow this up with a full disclosure and payment of the tax liability by 14 September 2012.If you think that you have not paid the correct amount of tax or would like advice please contact us.