Undeclared income is an area of lost revenue that HMRC

Nothing to Declare!

Undeclared income is an area of lost revenue that HMRC has been keen to uncover, ploughing sizable resources into its e-marketplace initiative – a clampdown on online traders who don’t declare income – and offering an amnesty for those who wanted to come clean. The campaign has now been wound down, but not before HMRC investigators had brought a conviction against one particular seller on eBay.

You may imagine that the sort of "online trader" who keeps income quiet is turning over a couple of hundred pounds a year or even a month. Pause a moment: remember that failing to declare income is illegal whatever the amount, so a couple of hundred, a few thousand, or even a million, is neither here nor there, not once you get caught, and all your affairs are scrutinised by highly trained forensics teams.

Undeclared income

A Big Catch

It’s not surprising that HMRC was keen to hold up the severed head of this particular online-trader character: he had turned over £1.4m in six years and never declared a penny! John Woolfenden from Radcliffe, Manchester, had not registered for VAT, had not paid any VAT on his commercial e-trading, and had not even registered as self-employed.

HMRC: We’re Watching

When Woolfenden’s online business Globalworldentertainments first came to the attention of HMRC during its e-marketplace initiative, the trader’s fraud amounted to unpaid taxes, interest, and money-laundering totalling almost £300,000.

The Brown Envelope on the Doormat

With more than 500,000 listings on eBay and other online trading sites, 52-year-old Woolfenden ignored HMRC’s letters asking him certain difficult questions about, for instance, absence of any tax records. Aware that he had come into the sight of the tax authorities, he had already started routing income through an American bank account in an attempt to disguise and launder the profits of his business.

The Raid and Forensic Evidence

When eventually HMRC inspectors raided his home, all the signs of a busy online trader were evident: huge stocks of DVDs, CDs and games; apparently even the shower was "stacked to the ceiling" with boxes. It didn’t take HMRC’s forensic accounts team too long to identify that payments of nearly £1.4 million had passed through Woolfenden’s online bank accounts over a six-year period.

Guilty As Charged Your Honour

Woolfenden pleaded guilty as charged to offences dating to between 2006 and 2013. He got off lightly in some respects as HMRC had found adverts for his business, Globalworldentertainment, stating that it had been trading for 20 years!

Is it Safe to Trade Online Now and Not Declare the Income?

The last words in this respect go to HMRC’s Sandra Smith: "HMRC is continuing to use the data gathered during the campaign to identify people who should have come forward but chose not to."

So What’s the Moral of this Story?

It’s just not worth not declaring income. DNS has all sorts of legal tax-planning tricks up its sleeve to ensure you pay what you owe but never more than what you owe. Should you be in any doubt that HMRC is still intent on raising revenue from tax evasion and non-compliancy, take a look at some of our recent blogs such as benchmarking merchant acquirer’s dating matching and the blog about the specialist "army" of highly trained individuals to look into HMR’s drive to recoup lost taxes.

Also See: Small Business Accountants in Manchester

Speak with an expert

Any questions? Schedule a call with one of our experts.

About the author
Blog Author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.

  • Book a free consultation
Receive accounting news and updates in your inbox

About the author
Blog Author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.


See how dns can help
you today.

Save tax
Save tax

Our experts will work with you to reduce your corporation, personal or any other tax liability, all within the rules of the UK tax legislations. We’ll ensure you’re claiming all allowances and expense claims that you would be elegible for.

Reduce your admin
Reduce your admin

We give free software to all of our clients. You’ll be able to raise sales invoices, snap pictures of receipts and be MTD compliant with ease. You can even manage your business anywhere there’s an internet connection, thanks to our mobile app!

Grow your business
Grow your business

Successful business owners are those that are on top of their numbers. Businesses are driven by the numbers behind them. If you’re not reviewing your profit & loss or balance sheet regularly, how would you know how your business has performed and how would you make proper business decisions? We can help you make sense of your numbers.

Free Business Software!

Limited time only!

Free Business Software

Say Goodbye to Bookkeeping Hassles: Nomi offers Free Receipt Processing and big savings!

  • Built in payment solutions.
  • Track profitability, debtors and creditors
  • Snap pics of receipts with the mobile app
  • Free Receipt Processing
  • Hasslefree Bookkeeping
  • Cost Reduction
Get Started
Close nomi