Marketplaces now report sellers to HMRC
Since 1 January 2024, online marketplaces such as eBay, Amazon, Etsy and Vinted have had to collect details about their sellers and send them to HMRC each January for the previous calendar year. The reports include who you are, your bank details, how many sales you made and how much you were paid. You're sent a copy of what's reported about you.
Who gets reported
If you only sell goods, the platform reports you when you make 30 or more sales, or receive about £1,700 (€2,000) or more, in a calendar year. Below both limits, you're not reported. People selling services through platforms, such as holiday lets and freelance work, are reported whatever the amount.
Being reported doesn't mean you owe tax
Selling your own unwanted belongings, such as clothes, toys or furniture, usually isn't trading. There's normally no income tax to pay, even if the platform reports you. (Selling a single item for more than £6,000 can bring Capital Gains Tax into play.)
You're likely to be trading if you:
- buy items to sell on at a profit
- make things to sell
- sell regularly, in an organised way, to make money
If you're unsure which side of the line you're on, ask us. It's a common question and the answer is free.
The £1,000 trading allowance
If your total trading income for the tax year, before any costs, is £1,000 or less, you don't need to tell HMRC. Above that, you'll need to register for Self Assessment and file a tax return.
You can deduct either the £1,000 allowance or your actual costs, not both. If you buy stock to resell, your actual costs are almost always higher, so claiming them is usually better.
You pay tax on profit, not sales
Your sales include the postage you charge buyers. From them you can deduct:
- what you paid for your stock
- marketplace fees, promoted listing costs and payment fees
- postage, packaging and storage
- refunds and returns
- the business share of your phone, internet and equipment
We match your marketplace reports to the payouts in your bank account, so the figures on your return agree with what the platform tells HMRC.
VAT: it's your sales that count
You must register for VAT if your taxable turnover goes over £90,000 in any 12 months. That's your total sales, not your profit. A reseller on thin margins can reach £90,000 of sales while making far less profit, so it's worth checking your rolling 12-month total every month. Overseas sales and imports have their own VAT rules, so ask us if you sell or buy stock abroad.
Making Tax Digital
Making Tax Digital for Income Tax is also based on sales before costs, together with any rental income. Over £50,000 in 2024/25 means you're in from April 2026, over £30,000 in 2025/26 means joining from April 2027, and over £20,000 in 2026/27 means April 2028. Our Making Tax Digital page has the details.
If your figures don't match, or you've never declared
HMRC uses platform reports to write to sellers whose tax returns don't match. Don't ignore a letter like this. If you owe tax for past years, telling HMRC yourself through its Digital Disclosure Service usually means lower penalties than waiting for HMRC to find it. We can work out what's owed and make the disclosure for you.