I added a post to the blog some time ago on declaring any earnings you make on eBay, Amazon or even just selling at the local car boot sale.
I found this story in a local paper about and eBay seller that thought he could cheat the system. Wrong answer Taxman and his buddy Vatman are really good at finding dodgers. If your buying and selling on eBay for a profit its very easy and simple. Register your business with Revenue & Customs, they will even help you complete the forms. Then keep up to date accounts of your earnings and pay any Tax & Vat due.
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