With more people turning to platforms like eBay, Vinted, and Facebook Marketplace to declutter or earn some extra income, the question keeps popping up: do I have to pay tax when I sell something online?
The answer depends on what you’re selling, how often you sell, and whether you’re making a profit. If you are looking for quick answers get in touch with Clayton Stirling & Co on 01474 321080 or via our contact page here.
Are You a Casual Seller or a Trader?
The biggest factor HMRC looks at is whether you’re just getting rid of personal items or running something closer to a business.
If you’re simply selling unwanted things from around the house — like second-hand clothes, old books, or unused tech — you’re classed as a casual seller. In most cases, this sort of activity isn’t taxable.
But if you’re buying items to resell, making things to sell, or running a regular selling operation with the goal of turning a profit, HMRC may view you as a trader. That’s when tax rules kick in.
The £1,000 Trading Allowance
Even if HMRC considers you a trader, you might not owe any tax straight away. In the UK, there’s a £1,000 trading allowance that applies to casual income.
If your total sales revenue stays under £1,000 in a tax year, you usually don’t need to report it. But if your income from selling crosses that threshold, even by a small amount, you may need to register for Self Assessment and declare it.
It’s worth noting that this is based on income, not profit. So if you make £1,200 in sales but spent £500 on stock, you’ve still crossed the allowance threshold and will need to report it.
When You Need to Tell HMRC
Generally, you’ll need to register as self-employed if:
- Your total income from selling items online exceeds £1,000 in a tax year.
- You’re clearly buying or making things to sell for profit.
- You already submit a tax return and this income needs to be included.
If you’re required to register, make sure you do so by 5 October following the end of the relevant tax year. Late registration can lead to penalties.
What eBay Tells HMRC
Since January 2024, eBay and other platforms have been required to share data with HMRC under new rules aimed at online sellers.
If your account hits certain thresholds — more than 30 sales a year and over €2,000 (around £1,700) in earnings — your details may be passed to HMRC. But even if you’re under these limits, HMRC can still investigate accounts that look like businesses.
That’s why it’s so important to keep clear records of what you sold, how much for, and any costs involved (like postage or packaging).
What eBay Tells HMRC (and Why the Threshold Is in Euros)
Since January 2024, eBay and other online selling platforms have been required to report certain seller information to HMRC under new international rules. These changes are part of a global agreement designed to make online income more transparent and ensure taxes are being paid where required.
The thresholds for reporting are originally set in euros, because the rules come from an international framework adopted by the UK. In practice, this means that eBay must report sellers to HMRC if:
- You earn over €2,000 (roughly £1,700) in a calendar year, and
- You complete more than 30 sales in that same year
Even if you don’t meet both of those thresholds, it doesn’t mean you’re in the clear. HMRC can still review accounts that appear to be operating like a business.
The takeaway? If you’re regularly selling online and making money, it’s wise to keep clear records and check whether you need to report that income — even if you haven’t been officially flagged. Need more info? Ready this question on the Ebay Forum about tax.
Final Thoughts: Better Safe Than Sorry
If you’re just selling the odd second-hand item, there’s probably nothing to worry about. But if you’re running a regular side hustle or making money from flipping items, it’s worth getting on top of your tax situation early.
Still unsure where you stand? Speaking to an accountant can save you a lot of stress — and potentially a lot of money too. If you are in any doubt and you want to consult a professional, get in touch with Clayton Stirling & Co today.
