HMRC targets eBay, Gumtree and other tax dodgers
The tax affairs of small businesses using eBay and Gumtree as well as music and maths tutors and tradesmen are being targeted by HM Revenue and Customs (HMRC) reports Richard Tyler in The Telegraph this morning.
It smacks slightly of desperation and is a very clear signal that the government’s coffers are empty when they are reduced to chasing very small businesses and individuals, the vast majority of whom will be on very modest incomes who may or may not be accounting for all their tax. It’s not that these individuals shouldn’t pay their fair share, however it seems somewhat disproportinate when large corporates have been able to hide off shore, or negotiate their tax bills downwards. Most high profile and notable examples have included:
Boots – domiciled in Switzerland
Barclays – well known for their tax avoidance schemes
Vodafone – who caused fury amongst protesters following a reported £6bn tax dodge
The advertising agency WPP
And Henderson Global Investors
Are all global companies, who it has been claimed have relocated their headquarters outside of the UK to minimize their exposure to UK tax.
Unfortunately Jo Smith a jobbing teacher doing a bit of maths tuition on the side to make a bit extra is unable to call on creative accountants and clever business planning to minimize his bill – but he may well be hounded to pay his extra tax. The bottom line is that Ebay and Gumtree are stimulating entrepreneurial spirit which is what we need in the UK. For many of these tiny traders, if they are successful over time they will legitimate their businesses as they develop. Just like big businesses, there will always be some who will operate outside of the law, or the spirit of the law, but tarring all with this brush is probably not very helpful. Small businesses generally just pay their corporation tax in full every year, unlike the big boys. Personally, at Verdant we would rather see big business pursued more aggressively. Struggling small and micro businesses need more help not less and HMRC should look at more creative solutions to bring these people into the fold and encourage them to grow their businesses legitimately.
