Traders face tax bills on Stella gains
Saturday 19 November 2005
Thousands of shoppers who are trying to sell Stella McCartney-designed clothes on the Internet auction site eBay could face HM Revenue and Customs (HMRC) investigations according to a leading accountant.
Ronnie Ludwig, a partner at chartered accountant Saffery Champness, warned the Revenue was likely to be monitoring sites such as eBay carefully in the run-up to Christmas, amid concerns that traders are not paying income tax on profits they make.
The row follows McCartney's sale last week of a one-off collection of designs at H&M stores around the country. The stores were mobbed by shoppers who battled to buy the designer's clothes at high street prices.
However, within hours of the stores selling out, many shoppers were advertising their bargain purchases on eBay at inflated prices. In one case, a silk dress that cost £59.99 in the sale was sold on the site for £198, a profit of more than 200 per cent.
Ludwig warned the Revenue was likely to crack down on people actually trading on eBay - as opposed to simply selling the odd item.
"Anybody who has bought Stella McCartney clothes from H&M and is now selling them on eBay may find themselves in trouble if HMRC concludes that they are formally trading," he warned. "The Revenue is interested in individuals who have knowingly bought a lot of stock with the intention of making a profit, but have no intention of declaring any resulting income."
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