That’s according to The Tax Advice Network, which is a network of independent specialist tax advisers. Chairman Mark Lee says monitoring social media and blogging sites is an extension of HMRC’s long-term practice of monitoring small ads in local papers and, more recently, Ebay and the like.
Lee is worried, however, that business people could be unintentionally incriminating themselves through their online activity or are unaware that what they’re doing consititutes a taxable trading activity.
He says: “The point is to be aware that HMRC are looking, or could be looking and that they could check back later if they have reason to think you’ve not been truthful. They can easily catch you out as to when you started in business, how many sources you have of trading income or how successful you’ seem to have been.
"Advertising items on Ebay, through marketplace adverts on social business networking sites like Ecademy and Adwords campaigns can be evidence of trading and create an obligation to report taxable income. Especially as there’s now an obligation to notify HMRC within 3 months of starting to trade."
What to do” Lee reckons if you’re generating money online, you’d do well to keep good records of your income and related expenses. This will make it easier to complete your tax return and to only pay tax on net profit rather than monies received.