'Missile for sale' and other bizarre items available at online auction sites, tax-free!

Although three grams of plutonium is probably the most extreme example, many other bizarre items have been offered to anyone making the best offer through auction websites and online classifieds.

Indeed, in the USA organisations such as the Bureau of Alcohol, Tobacco and Firearms (ATF), the State Department and the FBI are frequently to be found in eBay’s headquarters demanding information about sellers offering highly dubious wares such as tickets to a death row execution, a Russian missile launcher, or even Cuban cigars (since communist leader Castro took power in Cuba it has been against the law to sell Cuban cigars in the USA).

In most instances illegal items are withdrawn as soon as they come to the attention of the online auctioneer, but in one high-profile case the US Defence Department asked eBay to keep the listing of a missile on the site until they tracked down and arrested the seller. Even though extreme articles offered for sale, such as those mentioned, appear rarely, there is no doubt that many shady, stolen and downright illegal items have been offered for sale through online auction houses.

However, it’s not the nature of what is being sold online that causes most concern to the UK’s Inland Revenue, but how much potential income tax goes undeclared each year by online traders. The UK’s Black Market economy has been thriving since long before the invention of the internet, but the semi-anonymous nature of traders on the web allows them to successfully transact business without having to declare their income.

Although there are undoubtedly a fair number of legitimate online traders who adhere to the country’s tax laws, there is also a large amount that has no intention of declaring their earnings to the Revenue. Posting thousands of online ads each week, such ‘super sellers’ can easily evade the taxman. The fact that many sellers on auction sites or online classifieds go under a pseudonym known as a ‘user-id’ makes matching an individual with a tax reference to an online trader extremely difficult.

There are simply not enough Inland Revenue officers available to investigate whether online traders are legitimately declaring their taxes. With so many online buyers and sellers throughout the world it proves extremely difficult for the Revenue to check whether anyone is hiding online earnings.

It is the responsibility of everyone to provide details of their online earnings to Her Majesty’s Revenue and Customs, and that also applies to online traders. Those occasionally selling a few smaller value items online are not required to notify the Revenue of their gains, but anyone unsure of their taxation liability is advised to check the HMRC website.

About the Author

Paul McIndoe writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.