Users of Ebay and other online sales sites are facing a tax crackdown following government plans to obtain data on millions of internet transactions. HM Revenue and Customs wants to collect information from internet companies such as Paypal that would allow it to identify British users who have an income from online sales.

That would include Apple and Google app stores sales, and money made by renting out rooms or property through sites like Airbnb.

The planned powers will allow the taxman will collect names, addresses and revenues of businesses using the websites.

According to a report on The Telegraph website, which quotes senior tax accountants, this will be a “huge” collection of data by HMRC and require a correspondingly large upgrade to HMRC databases, as well as posing potential security and privacy risks.

HMRC gained new powers in 2013 that allowed it to access credit and debit card data, but it has so far been unable to access data from the likes of Paypal, which is owned by Ebay and is used by more than 20 million people in the UK.

Users of online platforms like Ebay who re-sell items on an infrequent basis are on the whole unlikely to be considered as traders, but tax is due on profits made online in the same way it is for other income.

It is thought that billions of pounds in tax is lost each year through unreported online income. According to HMRC the new powers will allow it to raise £860 million over the next five years.