No New Taxes for Online Sellers, HMRC Confirms

An online shopper uses the eBay tablet app in their living room in London on May 30, 2018. Stuart C. Wilson/Getty Images for eBay

Individuals selling unwanted items online will not be taxed but will have their sales data shared with HM Revenue and Customs (HMRC) if their profits exceed a specified threshold, the government confirmed on Thursday.

The assurance comes as HMRC reminded people that selling personal items, such as clothes or toys, does not trigger tax obligations unless they are trading or surpass specific limits.

The official reminder comes ahead of a new reporting process taking effect from January 2025.

Announced last year, new rules will require digital platforms like eBay and Vinted to share sales data of consumers with the UK’s tax authority.

This applies to individuals who, in 2024, sold at least 30 items, earned approximately £1,700, or provided paid-for services via an online platform.

“But whether selling last year’s festive jumper, getting some money back for a child’s outgrown baby clothes, or quietly offloading an unwanted Christmas present or two – absolutely nothing has changed for online sellers,” HMRC said in a statement.

Anyone looking to offload unwanted items online can continue to do so with confidence and without any new tax obligations, the tax authority added.

Users will be contacted by the platforms in January, informing them that their sales data, along with some personal information, will be shared with HMRC.

Information to be reported includes names, addresses, VAT or National Insurance numbers, bank account details, and total platform fees.

Angela MacDonald, HMRC’s second permanent secretary and deputy chief executive officer, said, “We cannot be clearer – if you are not trading and just occasionally sell unwanted items online – there is no tax due.”

“As has always been the case, some people who are trading through websites or selling services online may need to be paying tax and registering for Self Assessment,” she added.

Tax Compliance

While selling personal items generally does not incur income tax, some sellers might need to pay capital gains tax if individual items are sold for more than £6,000.

HMRC guidance highlights that sellers generating over £1,000 in total annual income from online trading or services may also need to declare this income and pay tax after deducting expenses.

Vinted and eBay have both confirmed their compliance with the rules.

Vinted clarified that users who sell items at a loss compared to their original purchase price will not owe taxes, while eBay stated it will report seller information to HMRC annually.

The new rules have raised questions among users about what constitutes taxable income and whether the so-called “side hustle” income is taxable.

One user who started selling items on Vinted in September 2022 said: “These are my own personal items, clothes, bags, shoes, outfits, mostly worn, but some new/unwanted gifts purchases from years ago.

“I don’t expect to make £1000 in the 2023-24 tax year (though I might just hit it if I get a good run of sales in this next quarter), however so far this tax year, I have sold around 60 items. I am unclear as to whether I would need to declare this on my tax return.”

HMRC confirmed that if gains from sold items remain under £6,000 for the tax year, there is no requirement to report.

Ahead of forming the government, Labour pledged to tackle tax avoidance to raise £5 billion annually by the end of the Parliament.

The party aims to use this revenue to fund the NHS, reduce waiting times, and support initiatives such as free primary school breakfasts.

In April, then-shadow chancellor Rachel Reeves said that addressing tax loopholes would fund additional hospital appointments, new scanners, and more dentist appointments.

Other plans include digitising the tax office and launching a wider range of tax schemes to be reported to HMRC under the disclosure of tax avoidance schemes regime.