Online platforms including eBay, Vinted and Airbnb have until the end of this month to report user earnings to HMRC under new international rules, a move that could lead to unexpected tax bills for some sellers, a charity has warned.
The Low Incomes Tax Reforms Group (LITRG) said confusion may arise because the UK tax year runs from April to April, while the data being reported covers the calendar year from January to December. This mismatch means sellers could mistakenly use incorrect figures on their tax returns.
Under the new rules, platforms must report users who earn more than £1,700 or complete 30 or more transactions in a year. While no new taxes have been introduced, more people may now be required to file tax returns and pay tax on earnings that were previously undeclared. The UK trading allowance allows individuals to earn up to £1,000 tax-free from side hustles.
Dawn Register of accountancy firm BDO warned that the date discrepancies mean HMRC will not receive perfectly accurate data, but it will be enough to identify potential trading activity and launch investigations. “The new rules may well mean that there are some nasty surprises in store for people who are either ignorant of the rules or trying to get away without paying tax,” she said.
An HMRC spokesperson clarified that selling unwanted personal possessions is unlikely to trigger a tax liability, but those who are trading or making a profit may need to declare income. “For people selling personal possessions online absolutely nothing has changed. If you aren’t trading and just occasionally sell unwanted items online there is no tax due,” the spokesperson said.
