Personal Finance

Why you might soon get taxed for selling on Vinted and eBay

Vinted, eBay and other sales websites will start passing on users' details to HMRC in a clampdown on unpaid tax from side hustles.

Websites must now tell HMRC how much individuals are making, with the information shared among all countries who have signed up to database.

It is an international effort by the Organisation for Economic Cooperation and Development (OECD) to stop tax dodgers.

Websites where people can make money that isn't declared to the taxman include:

  • Airbnb
  • Vinted
  • eBay
  • Depop
  • Etsy
  • Amazon
  • Upwork, Fivrr or other freelance platforms
  • Taxi hire
  • Food delivery
  • Driveway rental.

Other websites and money-making trades may also be included.

The rules came into force on January 1 but websites won't need to report the information until the end of January 2025.

However, not all users will be required to pay tax, with only those exceeding a threshold affected.

The rules are in place to "bear down on tax evasion" by those making sums deemed 'significant', HMRC said, meaning they will now be treated like other businesses.

A HMRC spokesperson said: "These new rules will support our work to help online sellers get their tax right first time. They will also help us detect any deliberate non-compliance, ensuring a level playing field for all taxpayers."

Information sent over will include a user's tax ID, bank account details and the amount and number of transactions made by sellers.

Do I pay tax on my online sales?

In the UK, individuals are allowed to make a set amount of additional income before they must register as self-employed and file a self-assessment tax return.

The first £1,000 made through property is tax-free, so those only making this amount through Air bnb or other avenues won't have to declare it.

Those who 'trade', such as selling items online or offering an ad hoc service, also have a £1,000 tax-free allowance.

Only those who exceed these limits need to fill in a tax return.

However, some advise sellers to keep records in case they are asked for them.

The OECD rules are slightly more relaxed, with firms only needing to share data about sellers who make more than 30 transactions or £1,735 (€2,000) a year. But remember you are still liable for tax to the UK Government if you make more than £1,000.

You can claim expenses for your side hustle which may bring your tax liability down.

So if you made £2,000 selling second hand clothes on Vinted, but you spend £1,500 buying them, your profit would only be £500, taking you under the £1,000 taxable threshold.

It's therefore a good idea to keep receipts to prove this.

There are a number of expenses you can claim if you're self-employed and they're detailed here.

Failure to pay tax on a side hustle

If you earn over the £1,000 threshold for additional income, you must declare it on a self assessment tax return.

Failure to pay tax on these earnings on time may see you fined and you may also be liable to pay interest on late payments.

Tax owed from one tax year must be declared and paid by the end of the following January.

For example, tax on any money earned between April 6 2022 and April 5 2023 (the 2022/23 tax year) must be paid by January 31 2024.

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Helen Barnett

Helen is a journalist, editor and copywriter with 15 years' experience writing across print and digital publications. She previously edited the Daily Express website and has won awards as a reporter. Read more here.


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