2024 marked the first year that digital platforms like Amazon, eBay, and Etsy were required to report seller information to HMRC. These reporting rules apply unless a seller made fewer than 30 sales in a year and earned less than €2,000 (approximately £1,700) from those sales.
Does This Mean You Owe Tax?
The new rules don’t introduce any new tax obligations, but they do increase HMRC’s ability to track undeclared income. If you’re selling online as a side hustle and haven’t been reporting your earnings, HMRC is now more likely to find out.
However, there has been a lot of misinformation circulating online, with some people mistakenly believing they now have to pay tax just for selling old clothes or unwanted items. That’s not necessarily true.
What Counts as Trading?
In a recent campaign, HMRC clarified:
- Selling unwanted personal belongings from time to time? You’re unlikely to need to pay tax.
- Regularly buying and selling with the aim of making a profit? That could count as trading, and tax may be due.
The £1,000 Trading Allowance
If your total sales income from trading is:
- £1,000 or less per tax year – No need to declare it.
- More than £1,000 per tax year – You must declare it on a Self Assessment tax return.
If you’re unsure whether you need to declare your sales, speak to our team today, and we’ll help you stay compliant while making the most of available allowances.