Selling online and paying taxes – yes that includes sites like Vinted and Ebay. New rules came into effect from January 1, 2024 for online selling platforms which could affect you even if you are selling second hand bits and bobs.
These rules will mean online selling platforms such as Vinted, Airbnb, Ebay and Depop, will have to share the amount of income generated by an individual between January 1 and December 31, 2024 for the 2025 tax year.
This is particularly applicable to those earning over the £1000 threshold selling personal items, to essentially pay tax on the profits. The online platforms are obliged to collect and share details of transactions with the tax authorities. Above the £1000 threshhold online sellers must register as self-employed and file a self-assessment tax return.
A HMRC spokesperson said in regards to selling online and paying taxes:
‘For people selling personal possessions online, absolutely nothing has changed.
‘The reason we’re asking digital platforms to share information with us is to ensure businesses operating via these platforms pay the correct amount of tax, and do not have an unfair tax advantage over high street and other traditional businesses.’
The amount of income earned by a person will be sent to them and HMRC by the respective online platform.
It will apply to sales of goods, such as second-hand clothes or handmade items, but also services including taxi hire, food delivery and short-term accommodation lets.
Selling online and paying taxes may sound crazy to the people just trying to clear out old clothes or bits and bobs, but HMRC have indicated it’s to crack down on businesses and traders using the platforms as additional sources of revenue, that do not declare tax on the profits.
If you have sold items on any of these sites, it’s worth checking to see how much you have sold in the past 12 months, and giving the Robinsons team a call to discuss.