HM Revenue and Customs (HMRC) has issued an alert to anyone who uses online selling platforms such as eBay, Vinted or Facebook Marketplace, ahead of the looming deadline for self-assessment tax return registration. Earlier this year, new rules came into force for people who sell on such sites.
These digital platforms are now obliged to collect and share details of transactions with HMRC. This has led to some confusion about what this means for people who use the sites to sell personal items, and whether they’ll have to pay income tax on the money they receive.
A new alert on X, formerly Twitter, from the official HMRC account has moved to clear this up somewhat. It reads: “There’s been a lot of speculation about new rules requiring online marketplaces to share certain details with us and what this means for taxpayers.
“The reality? There are no changes to tax rules for people who use online marketplaces.” The post adds: “You don’t need to pay income tax on selling your own personal items such as used clothes, an old TV, or unwanted furniture. This does not make you a trader”.
However, further guidance on Gov.uk explains that some people will have to pay tax. It reads: “To pay tax on the goods or services you sell online, you must either be trading or making a capital gain. If you buy or make goods to sell at a profit, you’re likely to be trading and will have to pay tax on your profits.”
Selling platform operators will report the details of your transactions to HMRC. This information is collected annually and sent to HMRC in the following January. and your income from selling goods or services on their platform to HMRC. They need to collect this information yearly and send to HMRC by the following January.
Your details will not be reported if you make less than 30 sales of goods, or if you receive less than around £1,700 for those sales. HMRC will share your information with your country’s tax authority if you live in another country that follows these rules.
HMRC advice also states people do not have to pay tax for the sale of personal items amounting to less than £6,000. If you earn more than this and need to register for a self-assessment tax return, the deadline to do so is this Saturday, October 5.