The taxman has recently invested £250,000 in a 'web robot' to catch out high-volume traders such as those on E-Bay who fail to register for VAT.

The robot is in fact an advance search engine.

It is thought that nearly 70,000 people earn a quarter of their living by trading on the E-Bay website. However, it is also thought a large percentage don't declare their income to the taxman.

Traders of second-hand goods only pay VAT on profits. However, if they fail to register or keep records to calculate this, then the taxman may ask them to account for VAT on the full value of the goods.

The VAT registration limit is presently £61,000 of turnover.

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