I spider tax man coming
by Chris Dawson
Today is the last chance for many eBayers in the UK to submit their self assessment tax return if they haven’t already done so. Not only that but by close of business today millions of people up and down the country will suddenly have lighter bank accounts as they settle any balancing payments from the 2005-2006 tax year and make the first payment for the 2006-2007 tax year. It’s an expensive time of year but for those that have adequate financial planning an accepted fact of being self employed.
What of those happily selling on eBay that have “forgotten” about the tax man? Well I guess they’ll be oblivious to the filling in and completing a tax return but will they get caught or are they home and dry laughing all the way to the bank?
A little known computer program called Xenon has been loose on the web for the last two years. Xenon is a spider which crawls website a little like Googlebot which trawls websites cataloguing everything in it’s path. While Google crawls the entire web Xenon is more specific restricting itself to Internet auction sites such as eBay. Slowly but surely it visits each individual auction and saves them along with links to all other auctions from the seller. Then it’s Identity Information Extraction Module correlates any information such as names, postcodes, cities, streets against national databases to identify mailing addresses and users real identities which can be matched with tax records.
Xenon originated in The Netherlands and now operates in four other countries as well - Austria, Denmark, Canada and of course in The United Kingdom. Next time you’re wondering if your competitors on eBay are undercutting you because they’re not paying tax relax with the thought that big brother really is watching. Time is running out for those cheating the system.
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[...] Following on from the Xenon revelation that HMRC is tracking all eBay auctions and cataloguing them for future investigations HMCR launch a new guide for people that trade online. The aim of the guide is to help you decide if you need to register to pay tax - either Income Tax, VAT or Capital Gains Tax. [...]
[...] The key point is to register, because if you don’t you will get caught! Not only do they have the new Xenon spider checking your auctions but they have countless other means of tracking you down. However they will look kindly on you coming forward and registering. If you contact them before they come calling for you it will be important in mitigating any tax and penalties due. There will be far more punitive penalties for those that do not register but get caught at a later date. [...]
[...] Tax authorities in several major eBay territories have been actively monitoring eBay with the Xenon Spider which catalogues all auctions. Although Xenon hasn’t been reported to be used in the US it is known to be live in both the UK and the US neighbour Canada. With some $52bn GMV in 2006 financial year, $25bn of which was in the US, it’s no wonder the IRS is interested in keeping tabs on which sellers are making how much profit. [...]
[...] Sellers who declare legitimate earnings have nothing to fear, but those that are not paying any taxes due should contact the Inland Revenue before the Revenue contact them. [...]