Changes are now in effect
This will make it easier for the taxman to crack down on anyone selling through the likes of Vinted, eBay etc. and not notifying HMRC even if their total earnings are less than the personal allowance. There are severe fines on these platforms not complying with this new legislation and also on the tax payer; in July 2023 one man lost an appeal against tax and incurred penalties (on top of the tax) of almost £30,000 on his earnings from the auction site eBay.
HMRC has always been able to request data from companies to confirm a taxpayer’s income, but the new disclosure rules will mean that the information is now shared automatically. It said the new rules will help taxpayers “get their tax right first time” and “bear down on tax evasion”.
Trading Allowance
Everyone has a tax-free trading allowance of £1,000 a year, which covers income from casual sources outside of a main job and includes selling goods online (it is total casual income not per category). Anything you make above this allowance may trigger a tax bill and you will need to fill in a self-assessment return or notify HMRC if your total income is less than the personal allowance. If you fail to do this any taxable income you can face severe penalties. There would also be interest for paying the tax late.”
Allowances
Anyone selling goods without intending to make regular profit, for example having a clear out and selling your old stuff online as a one-off, will not normally be considered as trading; there are also allowances around “chattels” but these areas can be complex and always best to seek professional advice.
Get in touch with us
MHR has a wealth of experience with personal tax returns for all levels of income; if you are concerned you may be liable please contact Mark or Gemma on 020 8894 6863 or email us at clients@mhrconsultancy.co.uk