Thousands of Brits selling clothes and items on popular reselling platforms like Vinted, Depop and eBay are facing a major tax shake-up that could impact their side earnings.
What's Changing for Online Sellers?
Starting from January 1, 2024, digital platforms including Vinted are now required to report seller information directly to HMRC under new rules designed to crack down on tax evasion. This means your selling activity is no longer flying under the radar.
How Much Can You Earn Before Paying Tax?
While the new rules might sound alarming, most casual sellers won't need to worry. You can still earn up to £1,000 per year through 'trading income' completely tax-free under the Trading Allowance.
However, if your profits exceed this threshold, you'll need to register for self-assessment and potentially pay income tax on your earnings.
Who Needs to Be Concerned?
The new reporting requirements primarily affect:
- Regular sellers treating reselling as a business
- Those earning over £1,700 annually from a single platform
- Sellers with more than 30 transactions per year
- People selling goods for profit rather than just clearing out old items
What Vinted Users Need to Know
Vinted has already begun contacting users who may be affected, requesting additional information including National Insurance numbers. The platform emphasises this is part of their legal obligations rather than a choice.
One concerned Vinted user shared: "I received an email from Vinted saying I need to fill in a form for HMRC. I'm just selling my old clothes - I didn't think this would count as taxable income."
Expert Advice for Online Sellers
Tax experts recommend keeping detailed records of your buying and selling activity, especially if you're approaching the £1,000 threshold. Remember that only profits (selling price minus original cost) count toward your allowance.
If you're simply selling personal items for less than you paid for them, this typically doesn't count as taxable income. The rules mainly target those buying items specifically to resell for profit.
The key takeaway? Be aware of the new rules, track your earnings, and seek professional advice if you're unsure about your tax obligations. The days of anonymous online selling are officially over.
